Nigeria’s cement market faces low demand, high production costs

Nigeria’s cement market is facing low per-capita consumption and high production costs, even as industry stakeholders say the sector has significant room for growth.

The Chief Executive Officer of HBM Nigeria, Lolu Alade-Akinyemi, said Nigeria’s cement consumption is below 150kg per person, compared with about 500kg in Egypt and 700kg in South Africa.

Speaking at the Experiencing Panterra event in Lagos, Alade-Akinyemi, represented by HBM’s General Manager, Readymix Concrete, Emmanuel Ilaboya, said manufacturers currently operate at only 20–30 per cent capacity utilisation, indicating substantial unused production capacity.

He identified foreign exchange pressures and energy costs as major factors driving up the price of cement. According to him, several key inputs used in cement and concrete production are imported, while even locally produced gas and oil-related costs are affected by dollar-denominated pricing.

He also pointed to Nigeria’s unreliable grid electricity as a major cost burden, noting that cement manufacturers often have to build and operate their own power plants, requiring significant capital investment.

Alade-Akinyemi, however, said the relative stability of the naira exchange rate over the past year has improved manufacturers’ ability to forecast costs and plan operations.

Meanwhile, Panterra CEO Tayo Odunsi called for greater transparency in Nigeria’s real estate sector, describing the industry as lacking a standard repository of information for investors and other stakeholders.

Panterra Chief Investment Officer Ayo Ibaru also said currency stability, deeper financing, security and increasing investment from Gulf, Turkish and Asian sources are reshaping West Africa’s real estate market.

He highlighted the $15.6bn Abidjan-Lagos Corridor, which will connect five countries, as a major potential driver of investment in industrial zones, port cities, logistics and real estate.