The long-running debate over the price of cement in Nigeria flared up again once more this week. Think tank Agora Policy published a report on the local cement sector and it blamed the structure of the industry for the situation. What’s more it also presented a compelling range of data backing up its argument. We’ll take a closer look.
Agora Policy published its report entitled ‘Market Power and Failure of Competition Policy in Nigeria’s Cement Industry,’ in early February 2026. It is well worth a read. It questions why the price of cement was so high in a country that had declared itself ‘self-sufficient’ in cement in 2012 and where production capacity was higher than demand. Its data then goes on to show that cement producers in Nigeria appeared to have higher profit margins than producers in Asia, Europe and elsewhere in Africa. It stated that cement producers in Nigeria reported average profit margins of approximately 49% in September 2025 and 34% in 2024. This compared to 20 - 36% in North America, 15 - 25% in Asia, 20 – 30% in Europe and 18 – 30% elsewhere in Africa. It then noted that cement prices in Nigeria had been higher than the average for Sub-Saharan Africa for nine of the 11 years from 2015 to 2025. It acknowledged that input costs such as taxes, negative currency exchange rates, energy prices and transport fees had played a role in pushing up prices. However, it directly blamed the structure of the market citing price leadership, regional dominance and control of critical inputs.
Distinctly from previous rows about prices in Nigeria, the think tank does not call for imports to be allowed in or increased. Instead, it recommends the following measures: access to limestone and clinker to be liberalised; logistics to be improved; regional market share to be scrutinised; operational data to be submitted to competition authorities; and general competition regulations to be tightened.
Notably, one of the things Agora Policy’s report mentions is how it views the use of excess production capacity by the local cement companies to control the market. Its interpretation is that, “incumbents with large unused capacity can credibly threaten to temporarily flood the market and cut prices if a new competitor attempts to enter.” So, plans by producers, such as BUA Cement announcement in January 2026 to build a new 3Mt/yr cement production line in Sokoto State, can be viewed as both addressing a market need and a strategic one. More capacity can potentially relieve price pressure or even reduce it but it can also be used to deter competitors from building plants. Another example of producers building new capacity in a market where capacity is greater than demand occurred in the last week. Lafarge Africa said it plans to expand its Ashakacem Plant in Gombe State and Sagamu Plant in Ogun State.
None of this is to say that the main cement companies in Nigeria appear to have broken any competition laws. They may simply be taking advantage of the existing market structure as most companies would in this situation. The debate on the price of cement in Nigeria has been a recurring one since 2020, with few answers so far. The acquisition of Lafarge Africa by China-based Hauxin Cement in mid-2025 did mark a change to the market composition. Yet, whether Huaxin Cement chooses to follow the logic of the local market situation or do something different remains to be seen. The real question at this point is whether the recommendations that Agora Policy has made are the right ones and if a government would actually want to implement them and be able to. A criticism of Agora Policy’s recommendations might point out that it is simply identifying general features of the cement business. Clinker production requires a high level of capital investment, mineral resources need to be secured, logistics are key for a heavy commodity and so on.
Finally, Arvind Pathak, the Group Managing Director of Dangote Cement reminded investors this week that his company is planning to make all of Africa self-sufficient in cement production. It’s both a noble goal and a commercial prize for a region with Africa’s demographic potential. Yet, if the experience in Nigeria is anything to go by, simply becoming self-sufficient in cement without governments making other changes may not be enough to build the Africa of tomorrow.