Economy

Cement: scarcity, intermediaries induce a rise in prices in the North-East

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Some residents of the Northeast attributed the rise in the price of cement to the widening gap between demand and supply of the product.

The Nigerian News Agency (NAN) survey in Bauchi, Gombe, Borno, Yobe, Adamawa as well as Jigawa, indicated an average price increase of 40 percent.

Survey respondents said several challenges affected production at factories, including the COVID-19 outbreak, reducing supply, while demand continued to rise.

Some of the respondents also condemned the activities of intermediaries, saying that these people have capitalized on development to make the situation even worse.

They called on the government to intervene by verifying the unhealthy activities of certain merchants and middlemen.

Others, however, blamed the rise on the high cost of transportation and other miscellaneous activities associated with cement sourcing and selling activities in the country.

Malam Ibrahim Sanusi, a cement dealer in the main Gombe market, called the increase “outrageous” compared to the price of the same product the previous year.

Sanusi said in December of last year he bought a Dangote brand bag for N2,400 and sold it for N2,500, same with the Ashaka brand.

“Now we buy Dangote Cement for N4,000 at their depot in Gombe and sell for N4,200, while Ashaka Cement’s business price is N3,900 and the retail price is N4,000. “, did he declare.

For his part, Alhaji Bello Bose, president of the Gombe State chapter of the Blocks Molders Association, said the price hike could be deliberate.

“Since October 2020, there was a shortage of cement in Gombe State, and now the price has gone up. This, for me, is deliberate, ”he insisted.

He added that many of its members would have quit the business if they had had alternatives, and therefore called on the government to intervene.

Efforts to seek comment from Ashaka Cement Company management in Gombe State on the cause of the price hikes did not yield results.

When contacted, the company’s head of corporate communications, Mr. Sarki Isa, promised to return to NAN after consulting with relevant department heads, but at the time of filing the report, he did not there was still no answer.

In Bauchi, Malam Bako Mohammed, president of the Railway Cement Depot, said low production by manufacturers was responsible for the current high price.

Mohammed told NAN that a bag which was sold for 2,500N last year is now 3,800N.

He said low production led to the product not being supplied to some retailers who paid for it months ago.

According to him, the situation has also forced retailers who have little of the old stock, to determine the price.

“When we try to ask questions, manufacturers would say that the value added tax (VAT) deducted by the government on products is too high and that’s why they don’t produce a lot.

“We used to go to Ashaka Cement in Gombe State to buy cement, but now even Ashaka is not producing.

“Now, due to the lack of supplies, we go all the way to Obajana in Kogi, or Benue State, to buy the product.

“The situation is worrying; I had paid for my shipment since November of last year, but so far I have not yet received my cement, ”he lamented.

The president also said that other circumstances that contributed to the price hike included the cost of transportation, loading and unloading.

Mohammed suggested that the government should discuss with manufacturers how to resolve the issue.

“In the past, the government had done this and the price had dropped dramatically; the current administration can also do the same, ”he said.

Alhaji Abubakar Lawal, a customer, who recalled buying a bag of cement at the rate of N2,500 last year, said the same now costs N 3,700.

Speaking about the cause of the rising prices, he said he was told that the producers maintained their machines because they had stopped production.

“For this reason, production has decreased while demand is still as before, or even higher, which has resulted in higher prices,” he said.

Alhaji Sama’ila Muhammed, a cement dealer in Damaturu, also attributed the price hike to the drastic reduction in supply.

“One of the reasons for the increase is that the demand for the product is much higher than the supply for the product,” he said.

He called for government intervention to close the current gap between demand and supply, just as he argued that the increase in ongoing capital projects nationwide is another factor.

In his contribution, Alhaji Usman Kasim, a cement dealer in Yola, observed that the price increase was linked to the activities of intermediaries, major suppliers / dealers and some senior executives of cement companies.

“I think one of the factors responsible for the increase in prices is the activities of intermediaries.

“These intermediaries are powerful; some of them have ties to senior executives at Cement Industries.

“The only thing that will stabilize the price is that the owners of the cement industry check the activities of some of their senior managers,” he advised.

Mr. Sunday Haruna, a member of the Adamawa Builders Association, observed that due to the rise in the price of cement, construction activity had declined considerably.

“Many people visit our headquarters on a daily basis to hire our members.

“Now we have observed that people are no longer coming to support our services, as usual, and we believe there is a link with the current high cost of cement,” said Haruna.

In addition, a Maiduguri-based builder Ibrahim Khalifa, who called for government intervention, urged the state government to resuscitate the dying Borno Burnt Bricks factory.

“Many estates in Maiduguri were built with bricks a few years ago.

“Brick construction doesn’t require a lot of cement and its structures last longer,” Khalifa said.

In Jigawa, Malam Usman Muhammed, a cement dealer for more than two decades, said no one could say precisely what was responsible for the price hike.

He said a bag now costs between N3,650 and N3,700, depending on the brand, compared to last year when the price was N2,700, adding that the development has affected clientelism.

“A while ago, we were selling around 4,000 bags a week, but today we are only selling 1,500 bags a week,” Muhammed said.

He also criticized certain dealers for manipulating prices in the market.

Another dealer, Musa Musa, told NAN that its sales have fallen by about 50 percent.

Some clients, mostly private resident developers and block industry operators in Jigawa, have complained that the price hike has affected their businesses.

Shuaibu Kabiru, a block maker, said he was forced by the circumstances to increase the price of his blocks by 15 percent.

Alhaji Sani Ibrahim, a private resident developer, said he had delayed his construction project for a very long time, believing the price of cement would drop.

For his part, a builder, Mr. Garba Auwwal, attributed the rise in the prices of construction materials, including cement, to the COVID-19 epidemic.

According to him, the COVID-19 pandemic has forced many industries to reduce their workforce, reducing the amount of goods produced, with a corresponding rise in prices.

Auwwal also said that restrictions on the movement of goods and services due to the pandemic had affected the price of commodities.

He suggested the creation of a body that would regulate the prices of building materials, including cement. (NOPE)

(NAN)

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