Agora Policy Explains High Cement Prices in Nigeria Despite Local Production

Agora Policy, a Nigerian policy think tank, delves into the reasons behind the persistently high cement prices in Nigeria despite the country's sufficient production capacity. The analysis reveals that market power failures and weak competition contribute to the price hike, rather than production costs.

Despite Nigeria achieving self-sufficiency in cement production since 2012, the current installed capacity exceeds local demand. Agora Policy highlights the dominance of three major producers in the market, leading to unusually high profit margins, with an average operating profit margin of 49% in September 2025.

The report indicates that the high prices are driven by market power rather than cost pressures, as cement producers enjoy significant profits. Agora Policy also notes that Nigerian cement is often sold at lower prices in export markets due to different tax regulations, creating disparities in pricing strategies.

The report emphasizes the need for reforms to promote competition, address logistical challenges, and enhance oversight to ensure fair pricing and sustainable industry growth.