By Franklin Iyamah | Recent public debate has again focused on the persistently high price of cement in Nigeria, particularly against the backdrop of strong and sustained profitability among the three dominant producers that control the domestic market. This outcome appears counterintuitive.

Nigeria achieved formal self-sufficiency in cement production as early as 2012, and installed capacity now exceeds domestic demand—conditions under which classical economic theory would ordinarily predict more subdued price dynamics. Instead, cement prices in Nigeria remain elevated, with industry profitability consistently above levels observed across Sub-Saharan Africa and comparable emerging markets (See Figures 1-4).

For context, as at end-September 2025, Nigeria’s cement producers reported average core operating profit margins of approximately 49%,^[i] up from about 34% in 2024. These figures are well above international benchmarks. In North America, cement and construction materials producers typically earn operating profit margins of 20–36%. In Asia, margins commonly fall in the 15–25% range, while European producers tend to operate at 20–30%. Across Africa (outside Nigeria), margins are generally lower (typically 18–30%) with outcomes shaped by market structure: higher in tightly consolidated markets such as Morocco, and lower in countries still working through excess capacity, such as South Africa. The contrast between capacity outcomes, pricing and profitability margins is difficult to ignore. Nigeria has built the capacity it set out to build, but the benefits of that achievement have yet to show up fully in prices paid by households, builders, and government.

Cement producers blame high cement prices on taxes, energy costs, transport bottlenecks, and financing constraints, noting that exported cement is cheaper because it is exempt from many domestic levies. But this explanation leaves an uncomfortable question unanswered: if costs are the binding constraint, why can Nigerian producers sell cement profitably abroad at lower prices than Nigerian households and builders pay at home? The gap suggests that market structure—and the pricing power it confers—may matter at least as much as cost pressures.

Figure 1: Cement Prices (USD per ton) – Nigeria and SSA Average^[ii]

Source: Dangote Cement Financials, Agora estimates *9m 2025.

Figure 2: Core Operating Profit Margins: Cement Producers in Nigeria vs SSA^[iii]

Source: Dangote Cement, BUA Cement, Lafarge WAPCO, Agora estimates *9m 2025.

Figure 3: Trend in Cement Prices in Nigeria (USD per ton)^[iv]

Source: Dangote Cement, BUA Cement, Lafarge WAPCO, Agora estimates *9m 2025.

Figure 4: Trend in Cement prices in Nigeria (NGN per ton)^[v]

Source: Dangote Cement, BUA Cement, Lafarge WAPCO, Agora estimates *9m 2025.

These questions are particularly salient in light of the policy bargain that shaped the industry’s evolution. In the late 1990s and early 2000s, domestic production capacity—estimated at roughly 2 million metric tonnes annually—was far below national demand, necessitating large-scale imports. To fix this, policymakers offered investors import protection, preferential FX access, tax holidays, and exclusive limestone concessions, in return for large-scale investment, self-sufficiency, and affordable cement to support housing and infrastructure. These protections were intended as temporary instruments to nurture domestic production, with self-sufficiency, not enduring market power, as the explicit objective.

By 2012, the production side of this bargain had largely been fulfilled. Nigeria achieved cement self-sufficiency, installed capacity exceeded domestic demand, and the country shifted from net importer to occasional exporter. However, the consumption side of the bargain—affordable prices disciplined by competition—has not materialised. Instead, the market has consolidated into a highly concentrated oligopoly with persistently high prices and margins, raising legitimate questions about whether infant-industry policies have outlived their purpose.

Framed this way, the issue is not whether the original policy was misguided—it succeeded in building capacity—but whether its terms now require recalibration. Cement is a critical intermediate input with economy-wide spillovers, and its pricing therefore poses a fundamental policy question: does the current fiscal, trade, and competition framework still serve the public interest, or are reforms needed to realign the sector with Nigeria’s development objectives?

Cement is not an ordinary product. It is a key input into housing, infrastructure, and construction—sectors that drive employment, productivity, and long-term growth. Every road, school, hospital, factory, and housing estate depends on affordable cement. When cement prices are high, the costs ripple through the economy: fewer homes are built, infrastructure projects become more expensive, private investment is delayed, and governments are forced to do less with limited budgets.

Many of society’s most persistent challenges are down the road of affordable housing. When housing is scarce or unaffordable, families are pushed into overcrowded or informal settlements, commuting times rise, productivity suffers, and access to jobs, education, and healthcare deteriorates. Cement prices sit at the very start of this chain. Prices that are higher than they should be act as a hidden tax on housing and infrastructure, while competitive prices unlock broad social and economic benefits.

Seen in this light, cement pricing is not merely an industry issue but a public-interest concern. Nigeria has already achieved scale and self-sufficiency in cement production. The policy question is therefore no longer how to build more capacity, but whether the current fiscal, trade, and competition framework supports affordable housing and inclusive growth. Reforms that restore competition in the cement market are not about dismantling the industry, but about ensuring that the gains from industrial policy translate into more homes, more infrastructure, and better outcomes for the wider economy.

Historical Background: The Making of Nigeria’s Highly Concentrated Cement Market  

The evolution of Nigeria’s cement industry is a textbook case of the country’s uneven experience with import-substitution industrialisation. Although Nigeria possessed favourable conditions for domestic cement production as early as 1927, large-scale production did not begin until 1960, when the world’s largest cement producer at the time—Associated Portland Cement Manufacturers (APCM), which supplied over 50% of Nigeria’s cement—established a plant at Ewekoro, in present-day Ogun State. This was done at the invitation of the then central government through the Western Nigeria Development Company, in partnership with the United Africa Company of Nigeria (UACN). The resulting entity, West African Portland Cement (WAPCO), would later be privatised in 2002 following its sale to Blue Circle, now part of the Lafarge Group.

The decision by a dominant foreign supplier to establish local production was not accidental. In the aftermath of World War II, the British Commonwealth faced a Sterling balance-of-payments crisis even as the approach of political independence reshaped commercial incentives across colonial markets. Cement imports had been a fiercely competitive business dominated by firms such as UACN, John Holt, and PZ Cussons. As independence loomed, tariff protection became both politically feasible and commercially attractive, creating strong incentives for first movers to substitute imports with domestic production. This convergence of interests between protection-seeking merchants and global cement producers underpinned the formation of regional cement consortia across Nigeria—in Ewekoro (West), Nkalagu (East), Mfamosing (East, but present South-South), and Kalambaina (North), with later expansions into Ashaka and Gboko (both in the North). A defining feature of these plants was their proximity to limestone deposits, the essential raw material for clinker, which in turn is the core component of cement.

As Peter Kilby observed in “Industrialisation in an Open Economy: Nigeria (1945–1966)”, cement production is one of the few industries in Nigeria that credibly satisfies the infant-industry protection argument, owing to substantial economies of scale and the ability to internalise transport costs into ex-factory prices. At the time, sea-borne cement imports incurred carriage costs of up to 70% of the producer’s factory-gate price. This conferred natural protection and a clear comparative advantage on domestic producers. This logic, however, began to unravel in the post-civil-war period. Rising oil revenues fuelled an unprecedented public-works programme, while a strong Naira and comfortable trade surpluses weakened the discipline imposed by balance-of-payments constraints. Domestic capacity failed to keep pace with surging demand, and imports ballooned. By 1974, government agencies were requesting millions of tonnes of cement, often at prices nearly three times the prevailing world levels. In this environment, merchant importers—and erstwhile reluctant industrialists—abandoned any residual commitment to domestic production and rushed to profit from the import trade. Import restrictions were loosened, cement poured in from Europe and North America, and port infrastructure was overwhelmed, culminating in the infamous cement import glut, captured in popular imagination as the Cement Armada.

The excesses of this episode were ultimately checked only after the oil price collapse and the subsequent economic crises of the 1980s and 1990s. Yet the episode left a lasting imprint on industry behaviour. The lesson absorbed by future cement producers was not merely that inland plants enjoyed natural protection from imports, but that the strongest defence against a return of import competition was to maintain domestic installed capacity comfortably ahead of demand growth. This logic—capacity pre-emption as insurance against policy reversal and import surges—would later become a defining feature of Nigeria’s cement industry, and, as will be shown, a foundational pillar of the oligopolistic market structure observed today.

With the return to democratic rule in 1999, the President Olusegun Obasanjo administration—confronted by renewed external account pressures—reinstated import restrictions and embarked on a comprehensive privatisation of government-owned cement assets. This was complemented with a suite of backward-integration policies, including preferential access to long-term limestone concessions and support for gas and related infrastructure, anchored on an explicit objective of achieving cement self-sufficiency within a decade. One by one, legacy plants and prospective projects were consolidated into a narrow cluster of three private operators—Dangote Cement, Lafarge Africa, and BUA Cement—laying the foundations for the highly concentrated market structure that defines the industry today. In return for tariff protection and multi-year tax holidays, these investors were required to demonstrate concrete commitments to expand domestic production capacity. By 2012, Nigeria had formally achieved self-sufficiency in cement production with annual industry name-plate capacity of 28 million tonnes well in excess of annual industry demand at 18 million tonnes.

The Present Supply Dynamics

As at end-2024, Nigeria’s installed cement capacity—estimated at roughly 65 million tonnes per annum—was more than double domestic demand of about 32 million tonnes. On the supply side, the industry remains highly concentrated, dominated by three large producers earning average EBITDA margins close to 50%. This compares with an African industry average of around 18-30% and global norms nearer 19%. The degree of profitability is such that Nigerian producers are able to export excess cement output at prices that are meaningfully lower than those prevailing in the domestic market, underscoring the extent of pricing power enjoyed at home rather than any binding cost constraint.

Figure 5: Installed Capacity and Domestic Demand for Cement in Nigeria (Million Metric Tonnes/Annum)

Sources: Dangote Cement, BUA Cement, Lafarge WAPCO & Agora Policy’s Calculations

Figure 6: Average EBITDA Margins of Cement Companies

Sources: Dangote Cement, BUA Cement, Lafarge WAPCO & Agora Policy’s Calculations

On the surface, Nigeria’s cement industry appears to operate as an oligopoly, where pricing outcomes in theory should be dictated by the strategic interaction among a small number of dominant firms. Under oligopolistic markets in economics, firms do not simply price at cost plus a fixed margin. Instead, each producer sets prices with an eye on how competitors are likely to respond, taking into account shared cost structures, the limited scope for new entry, and the relatively inelastic nature of demand for cement. The predictable outcome is that prices usually settle above marginal cost—often materially so—without reaching monopoly levels. The size of these mark-ups varies depending on how firms compete: whether through tacit coordination, price leadership, or muted rivalry constrained by entry barriers and local market segmentation.

Given the significant asymmetry in production capacity across the industry—most notably the market leader accounting for more than half of installed production capacity as shown in Figures 7 and 8—Nigeria’s cement market closely fits a price-leadership model. In such settings, the dominant firm, benefiting from scale economies and a lower average cost curve at higher output levels, effectively anchors market pricing, with smaller producers adjusting their prices in response rather than competing aggressively on price. This structure does not require explicit coordination: pricing discipline is sustained through observable capacity, repeated interaction, and the credible threat of output expansion by the leader. The result is a stable price regime that remains elevated relative to marginal cost, even in the presence of surplus capacity.

Figure 7: Installed Capacity of Nigerian Cement Companies

Sources: Dangote Cement, BUA Cement, Lafarge WAPCO & Agora Policy’s Calculations

Figure 8: Companies’ Share of Installed Capacity

Sources: Dangote Cement, BUA Cement, Lafarge WAPCO & Agora Policy’s Calculations

Crucially, excess capacity itself plays a strategic role. In industries like cement, where entry costs are high and plants are capital-intensive, maintaining surplus capacity can deter new entrants. Incumbents with large unused capacity can credibly threaten to temporarily flood the market and cut prices if a new competitor attempts to enter. Even if such price reductions are short-lived, they can be sufficient to “flush out” entrants who lack the scale, balance sheet strength, or patience to absorb sustained losses. The strategic role of excess capacity is evident not only in existing operations, but also in ongoing expansion decisions. For example, in January 2026, BUA Cement announced a US$240 million investment to build a new 3 million tonne-per-annum cement line in Sokoto. While such investments reflect operational strength and confidence, their timing and scale are notable in a market where installed capacity already exceeds domestic demand by a wide margin. In industries with high fixed costs and limited entry, continued capacity expansion serves a defensive purpose: reinforcing the ability of incumbents to respond aggressively to potential entry by temporarily expanding output or cutting prices, thereby raising the risks faced by new entrants. In this context, excess capacity should be understood not as an anomaly, but as a strategic feature that helps sustain dominance and limits competitive pressure.

These dynamics are reinforced by Nigeria’s regional production geography. The spatial distribution of cement plants—illustrated in Figure 9—means that effective competition is largely regional rather than national, shaped by transport costs, road conditions, and security constraints. In regions where the market leader’s plants enjoy scale and logistical proximity—most notably around Obajana and its inland corridors—the leader effectively sets the delivered-price benchmark. Other producers operating in overlapping catchment areas align prices accordingly, not because of explicit coordination, but because deviation is rarely sustainable given cost asymmetries and the leader’s ability to expand output.

Figure 9: Location of Major Cement Plants in Nigeria

Sources: Dangote Cement, BUA Cement, Lafarge WAPCO & Mangal Cement

Where cement plants are far apart or where transporting cement is expensive, the pricing power of the market leader is strengthened rather than diluted. In these areas, the leader effectively sets the highest price the market can bear, and smaller producers tend to align their prices just below—or at—the same level. This behaviour is not the result of coordination, but of practical constraints: undercutting the leader meaningfully is often uneconomic, while pricing above the leader risks losing customers. As a result, prices remain high even when multiple producers operate nationally.

By contrast, in the limited parts of the country where plants are located close to one another—such as Ogun State and parts of the South-South (Edo State)—competition is more visible. Prices vary within a narrower range, discounts and promotions are more common, and buyers have real alternatives. The spatial distribution of cement plants therefore helps explain why Nigeria’s overall surplus capacity has not translated into lower prices nationwide. Cement markets function region by region, and where transport and logistics limit customer choice, price leadership persists, and competitive pressure remains weak. 

Evidence from the Literature: How Market Power Weakens Price Competition in Cement Industry

This section examines the evidence from three studies on market power in cement from empirical literature.

The first paper is by Miller and Osborne (2014). The paper provides one of the clearest explanations of why cement prices remain high even in markets with multiple producers and surplus capacity. Studying the US Southwest, the authors show that high transportation costs fragment cement markets into local or regional zones, limiting effective competition. Because cement is heavy and costly to move, customers typically source from nearby plants, allowing geographically isolated producers to charge higher prices without losing sales.

A central finding is that firms engage in spatial price discrimination: plants charge higher mill prices to customers located nearby—who have fewer viable alternatives—and lower prices to more distant customers facing greater competitive options. Importantly, this behaviour does not require explicit collusion. It emerges naturally from geography, transport costs, and repeated interaction among firms. Where plants are clustered, pricing power is constrained; where plants are isolated, margins rise. The authors further show that banning spatial price discrimination would meaningfully increase consumer surplus, underscoring that geography-driven pricing power has real welfare costs.

These insights translate directly to Nigeria’s cement market. Nigeria’s cement plants are widely dispersed, logistics costs are high, and regional markets are poorly integrated. As a result, national surplus capacity does not translate into nationwide price competition. Instead, firms enjoy regional dominance, align prices within local catchment areas, and maintain elevated margins—consistent with a price-leadership and follow-the-leader dynamic. The paper therefore provides strong empirical support for the argument that Nigeria’s cement pricing problem is less about costs alone and more about spatial market structure. It also reinforces the policy case for treating logistics, plant location, and regional contestability as core elements of competition reform, rather than viewing cement purely through a narrow national capacity lens.

The second paper is from the World Bank (2016). It identifies access to limestone—the primary input in cement production—as a central source of market power in African cement markets, with Nigeria highlighted as a clear example. The report shows that where limestone concessions are awarded on an exclusive, long-duration, and geographically concentrated basis, dominant firms are able to foreclose entry by controlling the essential upstream input. In such settings, market concentration is reinforced not merely by scale economies, but by policy choices that limit access to critical natural resources, insulating incumbents from effective competition.

In Nigeria, the report notes that large vertically integrated cement producers hold extensive limestone reserves under Mining Lease Agreements and Exclusive Prospecting Licences, often covering volumes far in excess of immediate production needs and extending decades into the future. When combined with import restrictions and high transport costs, this control over limestone severely constrains the ability of new entrants—particularly independent clinker producers or grinders—to emerge, even where national cement capacity exceeds domestic demand. As a result, surplus capacity coexists with persistent pricing power, driven by upstream foreclosure rather than by cost fundamentals alone.

Importantly, the World Bank frames this as a competition policy issue rather than as an unavoidable feature of cement production. It cautions that granting geographic exclusivity over limestone beyond what is necessary to attract investment can entrench dominance and sustain elevated prices. For Nigeria, the report’s implication is that industrial policies originally designed to achieve self-sufficiency have matured into structural barriers to competition. Reforming the limestone concession framework—by limiting exclusivity, enforcing “use-it-or-lose-it” rules, and ensuring neutral access to mineral resources—is therefore presented as a critical lever for restoring competition and weakening the market power underpinning high cement prices.

The last paper is by Beirne and Kirchberger (2021) who provide one of the most compelling empirical analyses of cement pricing in developing economies and its broader development consequences. Using detailed global price data from the World Bank’s International Comparison Programme alongside firm-level information on market structure, the authors show that cement prices are systematically higher in countries with fewer producers and higher market concentration. Sub-Saharan Africa stands out as the most extreme case: cement prices are consistently higher than in other regions, even after accounting for input costs, scale, and institutional quality. Crucially, the paper finds that these price differences are not primarily driven by firms operating below efficient scale or by unavoidable fixed costs, but by sustained mark-ups arising from oligopolistic market structures. The paper’s contribution extends beyond pricing. By embedding cement market power into a capital accumulation framework, Beirne and Kirchberger demonstrate that high cement mark-ups impose disproportionately large costs on poorer countries, where cement represents a significant share of construction spending. In such settings, elevated cement prices act like a tax on investment, lowering long-run capital stock, infrastructure provision, and housing supply. For Nigeria, where cement is a critical intermediate input into housing and public infrastructure, the paper provides strong analytical backing for the argument that competition in cement is not merely an industry concern but a key development policy issue.

The authors provide evidence from global construction data which shows that cement typically accounts for about 8% of total construction costs, and in many lower-income, infrastructure-constrained countries—including much of Sub-Saharan Africa—that share is materially higher (15-20%). The paper notes that cement’s cost weight rises precisely where construction relies more heavily on concrete, making economies like Nigeria particularly sensitive to cement pricing. They also demonstrate that changes in cement prices pass through meaningfully to building costs, with a pass-through elasticity of roughly 0.4 to 1.0, meaning cement price increases translate directly into more expensive housing and infrastructure.

Taken together, the evidence from the three papers points to a clear conclusion: high cement prices in Nigeria are not primarily a cost problem, but a market-structure problem. Cement prices rise with concentration, while geography and transport costs give firms local pricing power even when national capacity is ample. Government policies, particularly the allocation of limestone concessions and restrictive market rules, have reinforced dominance rather than competition, and Nigeria’s experience fits this pattern. The implication is straightforward: the challenge is no longer to build capacity, but to restore competition. Doing so will require active competition enforcement to ensure that the gains from industrial policy are finally passed on to consumers and the wider economy. 

Why Import Liberalisation Alone Will Not Fix Cement Prices

Whenever cement prices rise in Nigeria, the most immediate policy response that does the rounds is for the Federal Government to reopen the door to imports. At first glance, the argument is appealing: allow cheaper foreign cement into the market and domestic prices should fall. However, Nigeria’s current cement market is structurally different from the import-dependent era of the 1990s and early 2000s, and a simple return to imports is unlikely to deliver durable price relief for a variety of reasons.

First, cement is inherently ill-suited to sustained import competition. It is bulky, heavy, and has a low-value relative to weight, making transportation costs a large share of the delivered price. Even when ex-factory prices abroad are lower, freight, port charges, inland haulage, and foreign exchange costs quickly erode this advantage. As a result, imports tend to be competitive only in limited coastal markets and only for short periods. Inland markets—which account for a large share of Nigerian cement consumption—remain effectively insulated from import pressure. This geographic reality means imports cannot provide uniform national price discipline.

Second, there is no meaningful global spare capacity that Nigeria can draw on. Cement is not a globally-traded commodity in the way oil or steel is. Seaborne cement trade is relatively small—estimated at roughly 200–250 million tonnes per year globally, representing less than 6% of global cement production. Nigeria alone consumes about 32 million tonnes annually. Even under optimistic assumptions, diverting a volume large enough to materially influence Nigerian prices would absorb a significant share of global seaborne trade and displace other importing countries. In practical terms, there is simply not enough flexible global supply to discipline prices in a large, inland-heavy market like Nigeria.

Third, even where imports are allowed, they may not meaningfully reduce prices in an oligopolistic market. When a small number of dominant firms control distribution networks and regional depots, imported cement can be absorbed into existing pricing structures rather than aggressively undercutting them. In such cases, imports become a price stabiliser for incumbents rather than a competitive threat, especially if import volumes are small relative to domestic capacity.

Fourth, imports are a blunt and often temporary instrument. When domestic prices spike, imports can enter opportunistically, but once prices adjust or FX conditions tighten, imports retreat just as quickly. This stop-start pattern does little to alter the underlying market structure. It may moderate prices at the margin, but it does not address the core sources of pricing power: concentration, control over limestone reserves, distribution dominance, and regional market segmentation. In effect, imports treat the symptom rather than the cause.

Finally, there is a policy credibility problem. Nigeria has already made—and largely achieved—a deliberate industrial policy choice to become self-sufficient in cement. Reverting to import dependence risks undermining investor confidence, discouraging long-term capital investment, and re-opening the door to the very external vulnerabilities that earlier policies sought to close. Policymakers are therefore understandably reluctant to rely on imports as a permanent solution, particularly in a sector that is now strategically important for housing and infrastructure delivery.

The implication is not that imports have no role, but that they cannot substitute for competition. Import liberalisation can serve as a short-term safety valve or a backstop against extreme pricing, but it is not a structural remedy. Sustainable price discipline in Nigeria’s cement market will come not from shipping bags across borders, but from restoring competition within the domestic market itself—by opening access to limestone, reducing logistics bottlenecks, separating production from distribution, and strengthening competition oversight.

This distinction matters. The policy choice is not between protection and imports; it is between temporary relief and structural reform.

Rebuilding Competition in Nigeria’s Cement Industry: The Case for Reform

Nigeria’s cement challenge is no longer one of capacity or technical capability, but of market conduct. The evidence shows that high prices are sustained not by unavoidable costs, but by a set of reinforcing practices: control over limestone inputs, dominance of distribution networks, regional market segmentation, and weak competitive oversight. These factors cumulatively allow a small number of firms to exercise durable pricing power and capture outsized economic profits. The objective of any policy reform, therefore, is not to dismantle the cement industry or reverse the gains of industrial policy, but to neutralise the mechanisms through which dominance is maintained and to restore competitive discipline. The proposed reforms are designed to reopen entry points, reduce structural barriers, and subject pricing behaviour to effective oversight, so that the benefits of scale and self-sufficiency are finally passed on to consumers, the construction sector, and the wider economy.

1. Open up Limestone and Clinker Access with Competitive Neutrality: Access to limestone and clinker—the key inputs for cement—should not be locked up by a small number of producers. Nigerian policymakers should introduce strict “use-it-or-lose-it” rules to prevent firms from holding mining licences they are not actively developing and ensure that new licences are awarded through transparent processes with clear, time-bound development milestones. The objective is to prevent dominant producers from blocking entry simply by controlling access to critical raw materials. Over time, regulators should prioritise the separation of limestone mining from cement production as the most effective way to dismantle this barrier to competition. While requiring mining licence holders to supply limestone or clinker to third parties on “fair and non-discriminatory” terms could be considered, such arrangements are difficult to enforce in practice and risk becoming ineffective without intrusive regulation. Structural separation offers a cleaner and more durable solution by removing both the incentive and ability of incumbents to use control over limestone as a tool to deter entry. This would make it easier for new cement producers and independent grinding plants to enter the market, increase competition, and help bring prices down.

2. Treat logistics as a competition reform, not just an infrastructure agenda: Transport constraints give cement producers local pricing power by limiting the number of suppliers buyers can realistically choose from. To address this, cement producers should be required to separate their distribution activities from cement production and allow third-party cement (with the introduction of a minimum level say 30% of tonnage) to move through their distribution networks. Reducing transport and delivery barriers would narrow price differences across regions and turn today’s nationally concentrated market into a set of genuinely competitive regional markets, where buyers have real choice and prices are more effectively disciplined.

3. Foster competition by addressing regional dominance directly: After two decades of protection-led consolidation, it is time for government to actively reassess whether existing market structures continue to serve the public interest. Where firms are found to exercise persistent regional dominance, antitrust remedies should be considered, including: (i) mandated divestment or leasing of excess capacity to new entrants; (ii) restrictions on further capacity expansion by firms designated as dominant; and (iii) introduction of parity rules preventing dominant producers from exporting cement at prices below those charged domestically. (iv) establish predefined policy triggers that automatically activate pro-competition measures (timed import relaxations, imposition of export equalisation duties, introduction of windfall taxes etc) when plant capacity utilisation falls below a threshold. These measures would not dismantle the industry but would restore competitive discipline and reduce the scope for sustained mark-ups. Nigeria’s cement challenge is no longer about building capacity; it is about rebuilding contestability. The policy tools that created scale must now be recalibrated to restore competition. Nigeria must explicitly integrate cement competition into national housing and infrastructure policy, recognising cement pricing as a macro-relevant bottleneck.

4. Mandate Operational and Pricing Transparency to Illuminate Market Conduct: Introduce a statutory requirement for all cement producers to regularly disclose (e.g., quarterly) key operational data to the competition authority on a periodic basis. This must include:

• Plant-level capacity utilisation rates, to distinguish between genuine supply constraints and strategic output management.
• Ex-factory prices per plant and per grade, to establish a transparent baseline for analysing wholesale and retail mark-ups.
• Regional sales volumes and average delivered prices, to map pricing patterns against plant locations and expose potential spatial price discrimination or regional dominance.

This disclosure regime serves a dual purpose: it arms the competition authority with the real-time data needed to monitor for anti-competitive conduct (like tacit collusion or capacity withholding), and it subjects industry pricing narratives to public scrutiny. Transparency itself can have a pro-competition effect by reducing the opacity that facilitates coordination and excessive mark-ups.

5. Strengthen competition oversight, with a focus on dominance and conduct: Market power in cement is not accidental; it is a predictable outcome of an industry dominated by a few large players. In Nigeria, this is already the case in industries such as telecommunications and electricity, where strong regulation reflects their strategic importance. By contrast, cement and fertilizer—both essential inputs into housing, infrastructure, and food production—remain largely outside effective competition regulation. This gap has allowed market power to persist largely unchecked. Addressing this requires a shift in enforcement priorities. The Federal Competition and Consumer Protection Commission (FCCPC) should begin with the introduction of a cement competition desk which undertakes targeted market reviews focused on areas where market power is most likely to arise, including control over limestone mining rights, transportation bottlenecks, and the deliberate build-up of surplus capacity to deter new entrants. The FCCPC should undertake and publish annual market studies on the cement sector, focusing on supply and demand conditions, regional pricing patterns, and indicators of dominance or anti-competitive conduct both upstream (limestone access) and downstream (distribution and logistics). These studies should also include transparent analysis of cost dynamics to improve market oversight and inform evidence-based enforcement. International experience shows that in markets divided by geography and logistics, firms can maintain high prices through exclusive contracts, preferential treatment of dealers, or regional price differences—even without any explicit agreement to fix prices. Effective competition oversight should therefore focus not only on cartels, but also on conduct that quietly limits competition and keeps prices high.

Conclusion

Much of the public debate—and the industry’s own defence—frames high cement prices primarily as the outcome of multiple cost pressures, including taxes, currency weakness, energy prices, and transport costs. While these factors clearly matter, this framing is incomplete. It overlooks the central reality that these costs are passed through to final prices within a market structure that facilitates and sustains extraordinary profitability. The empirical evidence is unambiguous: Nigeria’s cement prices are high not because costs are uniquely burdensome, but because the industry operates as a spatially fragmented oligopoly where price leadership, regional dominance, and control of critical inputs have neutralised the competitive discipline expected from surplus capacity.

The current outcome represents a fundamental divergence from the original policy bargain. Protection, incentives, and resource concessions were granted to achieve self-sufficiency and, ultimately, affordable cement for national development. The first objective has been spectacularly achieved; the second has demonstrably failed. The industry’s evolution from protected infant to entrenched oligopoly highlights a classic pitfall of industrial policy: without concurrent and assertive competition safeguards, scale can cement into dominance, and policy support can transform into structural barriers to entry.

Therefore, recalibrating Nigeria’s cement sector is no longer an exercise in stimulating supply, but one of restoring competition. The policy focus must shift decisively from capacity expansion to competition enhancement. This requires treating logistics as a tool for market integration, limestone mineral access as a lever for fair competition, and regional dominance as a legitimate target for antitrust scrutiny. The proposed reforms are not antagonistic to a healthy industry. They are essential to realigning private profitability with the public interest, ensuring that the gains from two decades of protection and investment finally flow through to lower construction costs, more affordable housing, and more efficient infrastructure delivery.

In the end, cement is more than a commodity; it is the literal foundation of national development. A competition policy that fails to check undue market power in this sector does not merely tolerate high prices—it indirectly taxes investment, constrains capital formation, and undermines broader economic progress. Addressing Nigeria’s cement puzzle is thus a critical test of whether the country’s economic governance can evolve from fostering oligarchic champions to cultivating competitive markets that work for all.

References

Beirne, J., & Kirchberger, M. (2021). Concrete Thinking about Development. World Bank Policy Research Working Paper. World Bank Group, Washington, DC.

Kilby, P. (1967). Industrialization in an Open Economy: Nigeria, 1945–1966. Cambridge University Press, Cambridge.

Miller, N. H., & Osborne, M. J. (2014). Spatial Differentiation and Price Discrimination in the Cement Industry. RAND Journal of Economics, 45(2), 221–247.

World Bank Group. (2016). Breaking Down Barriers: Unlocking Africa’s Potential through Vigorous Competition Policy. World Bank Group, Washington, DC.

 

^[i] This refers to earnings before interest depreciation and amortization (EBITDA).

^[ii] These prices were obtained using the US dollar adjusted revenue per ton of Dangote Cement’s Nigerian operations and Pan-African divisions. Given Dangote’s cement market leadership in Nigeria, the Nigerian price is a good proxy for Nigerian cement prices while prices across SSA geographies are representative. The SSA countries are Ethiopia, Tanzania, South Africa, Senegal, Zambia, Congo, Cameroon, Ghana and Sierra Leone.

^[iii] These are estimated operating profit margins of Dangote, BUA and Lafarge WAPCO. We adopt the operating profit margins published by Dangote Cement for its Africa ex-Nigeria operations as a proxy for margin trends across select SSA countries. The SSA countries are Ethiopia, Tanzania, South Africa, Senegal, Zambia, Congo, Cameroon, Ghana and Sierra Leone

^[iv] This is the dollar price of cement per ton using Naira exchange rate data from the CBN.

^[v] This is the Naira price of cement per ton using revenue and production data sourced from Dangote Cement, Lafarge Wapco and BUA Cement.