Senate asks FG to provide loan, tax incentives to boost cement production

The senate has asked the federal government to provide industrial incentives for investors to boost production of cement in the country. 

The upper legislative chamber also urged the government to offer concessionary loans and larger tax incentives for new entrants into the industry to encourage more valuable producers.

The resolution followed a motion titled “Need for Liberalisation of Cement Policy in Nigeria”, sponsored by Lola Ashiru, senator from Kwara, and five other lawmakers at the plenary on Tuesday.

There has been a surge in prices of cement across the country.

Last week, Dangote Cement, Nigeria’s biggest company by market capitalisation, denied reports that the company sells cement in Nigeria at significantly higher retail prices relative to other countries, particularly Ghana and Zambia.

Leading the debate on Tuesday, Ashiru said cement takes a large share of domestic expenditure and its price significantly affects government’s ability to provide infrastructural development needed to grow the economy.

The lawmaker said the price of cement in the country is controlled by three players, adding that if allowed to persist, it would have negative effects on the industry.

“The Nigerian cement market is oligopolistic in nature with three players – Dangote Cement (60.6 percent); Lafarge Africa Plc (21.8 percent) and BUA Group (17.6 percent) largely dominating the scene, therefore making it susceptible to price-fixing practices,” Ashiru said.

“If the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of producing cement locally.”

The senator noted that frequent rise in cement prices and the low purchasing power of Nigerians may result in substandard building constructions and increase in abandoned structures in the country.

He added that there is an urgent need to encourage more local production of cement to meet the demands of Nigerians.

The motion was adopted after it was put to a voice vote by Senate President Ahmad Lawan.