The Chairman of BUA Cement, Abdul Samad Rabiu, has attributed the high cost of cement to the exploitation of consumers by middlemen within the supply chain.
Rabiu noted that the activities of those intermediaries undermined his company’s policy to maintain a N3,500 per bag price in 2023.
He made this disclosure at the 8th Annual General Meeting of the company recently in Abuja.
According to Rabiu, while BUA Cement sold over a million tonnes of cement to dealers at N3,500 per bag, intending that the benefits would be passed on to end-users, the dealers sold the cement to consumers at prices as high as N7,000 to N8,000 per bag.
The Chairman of BUA Cement, Abdul Samad Rabiu, has attributed the high cost of cement to the exploitation of consumers by middlemen within the supply chain.
Rabiu noted that the activities of those intermediaries undermined his company’s policy to maintain a N3,500 per bag price in 2023.
He made this disclosure at the 8th Annual General Meeting of the company recently in Abuja.
According to Rabiu, while BUA Cement sold over a million tonnes of cement to dealers at N3,500 per bag, intending that the benefits would be passed on to end-users, the dealers sold the cement to consumers at prices as high as N7,000 to N8,000 per bag.
In a bid to ensure housing affordability in Nigeria and address the country’s housing deficit, the government has implemented several measures, including stakeholder engagement.
However, many of those interventions seem out of reach for the average citizen, with the high unit cost of houses often blamed on the rising cost of inputs.
The International Human Rights Commission reported last year that more than 28 million Nigerians lack access to decent and affordable housing.
In May 2023, the average price of cement was N4,300 per bag, rising to between N7,500 and N8,000 per bag in May this year, depending on the brand, representing a 74.42 per cent to 86.05 per cent increase.
The recent surge in housing costs has sparked concerns among experts that it may force more Nigerians to settle for subpar living conditions.
With rents having doubled on average over the past four years in major cities, property owners with unfinished buildings may be tempted to occupy them without essential amenities to avoid the escalating rental fees, further exacerbating the issue of inadequate housing.
Rabiu explained that BUA Cement had to discontinue its low-price policy as it was not intended to subsidise dealers.
He noted that the company could not control the prices in the open market, where dealers were making substantial profits from the high margins.
He further added that the devaluation of the naira last year and the removal of the fuel subsidy also contributed to the unsustainability of the policy.
“We were selling cement at N3,500 with the expectation that dealers and retailers would pass the benefits of the low price to end-user customers, but some were selling at N7,000 and N8,000 per bag, making a lot of money from the very high margin. I think we sold more than a million tons at N3,500 before we realised what the dealers were doing.
