The Senate says providing concessionary loans and tax incentives to new investors would help reduce the price of cement in the country.
The Senate, on Tuesday, called on the federal government to provide more industrial incentives and protections such as offering concessionary loans and larger tax incentives for new entrants into the cement business.
This, the lawmakers said, is in order to boost production of cements, reduce price and encourage more valuable producers in Nigeria.
This call was a sequel to the debate on a motion on the “need for liberalisation of cement policy in Nigeria.”
The motion was sponsored by Kwara lawmaker, Lola Ashiru, and five other senators.
The deliberation comes on the heels of scarcity and a hike in the price of cement across ths country.
Many cement dealers say the price of cement increased by 40 to 67 per cent in different regions of the country in the last one year and that the hike was majorly caused by the COVID-19 pandemic and increase in exchange rate.
The price range (of different products), in this short period, skyrocketed from about N2,600 to N3,900.
Leading the debate, Mr Ashiru noted that cement takes a large share of domestic expenditure, and its price significantly impacts the government’s ability to provide infrastructural works required for the growth of the economy.
He blamed the slow pace of construction across the country on the increase in the price of cement which he said has negatively affected labour engagement and almost collapsed the procurement plan of the government’s in 2020 Appropriation Act
“The Nigerian cement market is oligopolistic in nature with three players – Dangote Cement (60.6 per cent); Lafarge Africa Plc (21.8 per cent) and BUA Group (17.6 per cent) largely dominating the scene therefore making it susceptible to price fixing practices.
“If the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of producing cement locally,” he said.
The significant rise in cement prices and the low purchasing power of Nigerians, he said, may result in substandard building constructions and non-completion of planned infrastructural works.
He added that there was an urgent need to encourage more local production of cement to satisfy the demands of Nigeria with a steady growth rate of approximately three per cent per annum. And that unfavourable government policies like imposing multiple taxes, erratic power supply, government ban on importation in violation of ECOWAS Trade liberalisation Scheme (ETLS) and subsequent lifting of importation in favour of few producers have negative implications on the growth of our infrastructures.
Prior to the adoption of the prayer, Ibrahim Gobir (Sokoto East) stated that the cement sector is a private sector and everybody is free to operate their business with no restrictions.
“What is fundamental here, is that the federal government should create incentives for the investors,” he said.
Source: Premium Times