Just a few days ago, Dangote came under attack from Nigerians when a report emerged that Dangote cement is sold for N1,800 in Zambia but sells for N3,500 in Nigeria. Nigerians were paranoid when the report was made, and concluded that Dangote is exploiting Nigerians.
The report said that Dangote cement is relatively high in Nigeria as compared to other countries, especially Ghana and Zambia.
In a recent report by Sahara Reporters, the management of Dangote Cement Plc has broken silence over the report and has explained why the price of cement is more expensive in Nigeria as compared to other countries.
In a statement which was issued by Dangote’s Group Executive Director, Strategy, Portfolio Development and Capital Projects, Devakumar Edwin, he said that the price of cement sells for $5.1 in Nigeria, with VAT included, meanwhile, in Ghana it sells for $7.2 and $5.92 in Zambia ex-factory, with all taxes included.
He said that they only have control over its ex-factory price, but has no control over the product when it gets into the market. And that it is proper to always differentiate between the ex-factory price and the price of the product in the market. He said that the information that Dangote cement sells at a higher price in Nigeria as compared to other countries is false and misleading.
He said that because of the COVID pandemic, the demand for cement has risen all over the world, and that Nigeria is not excluded from that. And that construction activity has also increased because of the combination of several factors like low returns from the capital market and changes in monetary policy.
He said that because they wanted to meet up with local demands, they had to suspend export from their new export terminals, thereby missing out on dollar earnings that would have come in from there. And that they had to reactivate their 4.5 million ton capacity at their Gboko Plant which was shut down for years, and now they are running it at a high cost, just because they want to meet with local demands and ensure the price of cement is kept under control in the country.
He said that as of 12th April, 2021, the price of a bag of cement from its factory and plants across the country is sold at N2,450 in Obajana and Gboko and N2,510 at Obese, with VAT included.
He said they only charge their customers between N300 to N350 per bag for delivery within a 1,200km radius, and that even though the demand for cement is now high, they have been careful not to take advantage of the situation and increase the price of cement.
It is good that they have made clarifications on the matter. So it is now clear that they are not the ones responsible for the high price of cement in Nigeria as compared to other countries. They sell the product at a relatively modest price, but the retailers sell it at a higher price when the product gets into the market.
I think this has to do with lack of proper price regulation, because retailers in Zambia could have increased the price also in the market also the same way it is in Nigeria, but yet the price is modest enough in the market over there.
I think price regulations agencies in Nigeria need to look into things like this, because in the end, it is the average Nigerians that suffer for it.
The high cost of cement leads to high cost of building, and the high cost of building leads to high cost of rent. Many Nigerians cannot afford rent these days because of the cost, and it is disheartening. And there is a need for the related bodies to look into these things to help the average Nigerians out there.
What do you have to say about these clarifications from Dangote cement – do you think they are still to be blamed for the high cost of cement in Nigeria? As you tell us your mind, please share the article too so that others can also benefit from your comments.