Nigeria prepares new Policy to ease the tempest from Cement glut

Story of glut in the Nigerian cement sector hit the news a few weeks ago – coming as something that’ll taper after festivities or when construction picks up, instead continued and straggled, dragging merchants into fray. It has become a dustup between local manufacturers and importers. Importers are blamed for excessive importation, effect that has led to a halt in local production and firing of staffers. Government has walked in, with the Minister for Trade and Investment, Olusegun Aganga, speaking broadly on the issue. He said, “Following the tremendous success recorded through the introduction and rigorous implementation of the Backward Integration Policy in the cement industry, we are planning to review the entire policy to consolidate on the gains so far recorded.” “We have achieved everything we set for ourselves 10 years ago when the Backward Integration Policy was introduced, and we want to thank all stakeholders and investors in the sector for the success story recorded so far. However, we want to take the next step as part of our strategy on the way forward. We are forming a group of people that will look at the cement policy in details and come up with the policy response that we need to have in place to take that next step that will make us a major exporter and user of cement in terms of consumption” He continued, “In 2002, the major priority of the country’s Backward Integration Policy was about cement production from limestone. I am delighted to say that after 10 years of implementation of the BIP, the good news is that we started with two million metric tonnes capacity, but today, we have about 28 million metric tonnes capacity of cement or investment of about $6 billion; which provides direct and indirect employment for about two million people. And because of what we have done together, we have been able to save the country foreign exchange of about N210bn per year,” Aganga said. “For the first time ever, this ministry did not issue any import licence in 2012. This is a remarkable achievement and a major economic success for our country. However, we want to carry out a deeper review of the cement sector to ensure that it is more competitive not just locally but internationally because we are at a point where we should be thinking about exporting some of our products.” “This means that we need to look at the overall structure including the current pricing, availability, affordability, in addition to developing an export strategy for the sector.” “This is the key message that I want to pass across in terms of where we are today and what our plans are in terms of where we want to be – going forward. I want to carry everyone along in terms of what we are looking at and incorporate your inputs into what we are planning to do so that at the end of the day, it will be a win-win situation for all the manufacturers, consumers and the Nigerian economy at large.” “At the end of the day, this is one of the sectors that Nigeria should, and will be rightly known for as one of the greatest contributors to the GDP of the country,” he said