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Senate seeks more incentives for new entrants to cement production

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Senate seeks more incentives for new entrants to cement production

By Naomi Sharang

The Senate called on the federal government to provide more incentives and industrial protections, such as concessional loans and larger tax incentives for new entrants to cement production.

This is to stimulate cement production, reduce prices and encourage more valuable producers in Nigeria.

The Senate resolution followed a motion in plenary Tuesday on “The Need to Liberalize Cement Policy in Nigeria” sponsored by Senator Lola Ashiru (APC-Kwara)and co-sponsored by five other senators.

Moving the motion, Ashiru said cement is one of the few building materials in which Nigeria is self-sufficient.

He said cement takes a large share of domestic spending, and the price of the product has a significant impact on the government’s ability to deliver the infrastructure works needed for the economy to grow.

“The recent increase in the price of cement from N2.600 to N3.800 has slowed down the amount of construction work undertaken, thus negatively affecting labor engagement.

“The Nigerian cement market is oligopolistic in nature with three players: Dangote (60.6%), Lafarge Africa PLC (21.8%) and BUA Group (17.6%) largely dominating the scene, which makes it vulnerable pricing practices.

“If the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of local cement production,” he said.

He said the significant rise in cement prices in the country and the low purchasing power of Nigerians could result in the construction of substandard buildings and the non-completion of planned infrastructure works.

Ashiru therefore called for the urgent need to encourage more local cement production to meet Nigeria’s demand with a steady growth rate of around 3% per year.

Of the motion’s three prayers, only one was passed by the Senate after a voice vote from Senate Speaker Ahmad Lawan. (NOPE)

(NAN)

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