Good news for builders and contractors! The price of cement, a crucial construction material, has begun to decline across Nigeria. A recent survey by BusinessDay revealed a price drop ranging between N7,000 and N7,500 per bag, depending on the location and brand.
Retailers and distributors attribute the price decrease to two key factors: reduced demand and government intervention.
Demand Slump Forces Price Adjustment
At the height of the price surge, many construction projects were put on hold due to the high cost of cement. This drop in demand created a surplus in the market, putting pressure on prices to come down.
“Nigerians stopped demanding for cement,” explained Collins Okpala, a cement dealer in Abuja. “Many project sites were abandoned, so developers sat back and waited for the prices to fall. It’s basic economics – when demand drops and supply remains high, prices have to adjust.”
Government Intervention Plays a Role
The federal government also played a part in bringing down cement prices. They convened a meeting with major producers, where an agreement was reached to cap the price of a cement bag between N7,000 and N8,000 depending on location. While producers were initially hesitant, the market forces created by reduced demand ultimately led to a price correction that aligned with the government’s recommendations.
Looking Ahead: Further Price Drops Possible
While there’s a sigh of relief for those in the construction industry, some retailers warn that further price reductions may be slow. The final selling price often involves multiple stakeholders, including manufacturers, wholesalers, and retailers. Additionally, some retailers may still be selling from older, higher-priced stock.
The overall trend appears positive. With continued low demand and a more balanced market, Nigerians can expect cement to become more affordable in the coming months.
