Producers slash cement prices: President Goodluck Jonathan's ultimatum to cement manufacturers in Nigeria to reduce the price of the product expired last month Ojore Alinyeju reports on the response from producers.

Author:Alinyeju, Ojore
Position:Nigeria
 
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Nigeria's President Goodluck Jonathan's public image is of a leader that listens to the masses. In May this year, he issued a directive that endeared him to the ordinary Nigerian. Jonathan, who held a meeting with cement manufacturers at Aso Rock Villa in Abuja, the nation's seat of power, gave them an ultimatum to reduce the escalating price of cement within 30 days. This followed an outcry from stakeholders in the industry, particularly the common man, who bemoaned the escalating price of the product, a major ingredient used in the construction industry.

Jonathan's directive appears to have borne fruit $0 far, as the manufacturers have all complied. Before the ultimatum, the average price of a 50kg bag of cement was N2,500 ($16). The price, which has since maintained a downward spiral, is currently about Ni,600 (a little over $10). Independent media surveys indicate that the price has dropped by about 35% across the country, depending on the cement brand and the retailer's location.

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Putting the cart before the horse?

While some have hailed Jonathan for his intervention in the cement subsector of the economy, others are of the view that the Federal Government is putting the cart before the horse because it has not created an enabling environment that would give local manufacturers a competitive edge to effect price reduction dictated purely by market forces.

For instance, the Federal Government's long-standing promise of addressing the epileptic power supply in the country has yet to become a reality, while the price of diesel rose astronomically from its previous price of N8o ($0.50) per litre to about N170 ($1.08 ) per litre.

Be that as it may, cement manufacturers swung into action immediately the directive was given, with a view to ensuring full compliance. The Chairman of the Cement Manufacturers Association of Nigeria (CMAN), Engineer Joseph Makoju, told African Business: "Manufacturers had to help boost the distribution of the product in order to achieve the reduction in the price of cement that we have now experienced. Dangote Group, for example, took measures such as purchasing 5,000 trucks for the distribution of...

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