Cement: Scarcity, middlemen, induce price hike in North-East — Survey

 

Some residents of the North-East have attributed the rise in the price of Cement to the widening gap between the demand and supply of the product.

The News Agency of Nigeria (NAN) survey in Bauchi, Gombe, Borno, Yobe, Adamawa as well as Jigawa, indicated an average of 40 per cent increase in price. Respondents to the survey said several challenges affected production in factories, one of which is the outbreak of COVID-19, thus reducing supply, while demand kept increasing. Some of the respondents also condemned the activities of middlemen, saying such people capitalised on the development to further worsen the situation. They called on the government to intervene by checking the unwholesome activities of some dealers and middlemen. Others however blamed the hike on the high cost of transportation and other sundry activities associated with the business of procurement and sales of Cement in the country. Malam Ibrahim Sanusi, a Cement Dealer at the Gombe main market described the hike as “ outrageous” when compared with the price of the same commodity the previous year. Sanusi said in December last year, he bought a bag of Dangote brand for N2,400 and sold it for N2, 500, same with the Ashaka brand. “Now, we buy Dangote Cement for N4, 000 from their depot in Gombe and sell for N4, 200, while the company price of Ashaka Cement is N3,900, and the retail price is N4, 000,” he said.

On his part, the Chairman of Gombe state chapter of Blocks Molders Association, Alhaji Bello Bose, said the hike in price may be deliberate. “Since October 2020, there had been a scarcity of Cement in Gombe state, and now, the price has been hiked. This, to me, is deliberate,” he insisted. He added that many of his members would have left the trade if they had alternatives, and therefore called on the government to intervene. Efforts to secure comment from management of Ashaka Cement Company in Gombe state on the cause of the price hike did not produce results. When contacted, the Head of Corporate Communications of the company, Mr Sarki Isa, promised to get back to NAN after consultations with concerned departmental heads, but as at the time of filing the report, there was still no response. In Bauchi, Malam Bako Mohammed, Chairman, Railway Cement Depot, said that low production by manufacturers was responsible for the current high price. Mohammed told NAN that a bag that was sold for N2,500 last year, is now N3,800. He said that the low production had led to the non-supply of the product to some retailers who had paid for it months ago. According to him, the situation has also forced retailers who have little of it from the old stock, to determine the price. “When we try to ask questions, the manufacturers would say that the Value Added Tax (VAT) being deducted by the government on the products is too high and that is why they are not producing much. “Before, we used to go to Ashaka cement in Gombe state to procure Cement, but now, even Ashaka is not producing. 

“Now, because of the lack of supply, we do go as far as Obajana in Kogi, or Benue state, to buy the product. “The situation is worrisome; I had paid for my consignment since November last year but up till now, I am yet to receive my Cement,” he lamented. The chairman also said other circumstances that contributed to the hike in price included the cost of transportation, loading and off-loading. Mohammed suggested that government should discuss with manufacturers how to address the problem. “In the past, the government had done it and the price reduced drastically; the present administration can equally do same,” he said. Alhaji Abubakar Lawal, a customer, who recalled buying a bag of Cement at the rate of N2,500 last year, said the same now costs N3,700. Speaking about the cause of the hike in the price, he said he had been told producers were servicing their machines, as such had stopped production. “For that reason, production decreased while demand is still the way it used to be, or even higher, resulting in the price hike,” he said. Alhaji Sama’ila Muhammed, a Cement Dealer in Damaturu, also attributed the price hike to the drastic reduction in supply. “One of the reasons for the hike is that demand for the product is much higher than the supply of the commodity,” he said. He called for the intervention of the government to close the current gap between demand and supply, just as he argued that an increase in ongoing capital projects nationwide, is another factor. In his contribution, Alhaji Usman Kasim, a Cement Dealer in Yola, observed that increase in price had to do with activities of middlemen, major Suppliers/Dealers, and some top management staff of Cement companies. ” I think one of the factors responsible for the increase in price, is the activities of middlemen. ” These middlemen are powerful; some of them have a connection with top Management officers of Cement Industries. ” The only thing that will stabilise the price is for the Cement industry owners to check the activities of some of their top management staff,” he advised. Mr Sunday Haruna, a member of, Adamawa Builders Association, observed that due to the hike in the price of Cement, building activities had reduced drastically. ” Many people visit our Headquarters on daily basis to hire our members.

” Now, we have observed people are no longer coming to patronage our services, as usual, and we believe there is a link with the present high cost of Cement,” Haruna said. Also, a Maiduguri-based Builder, Ibrahim Khalifa, who called for the intervention of the government, urged the state government to resuscitate the moribund Borno Burnt Bricks factory. “Many estates in Maiduguri were constructed with bricks some years back. “Construction with bricks does not require much cement and its structures last longer,” Khalifa said. In Jigawa, Malam Usman Muhammed, a Cement Dealer for more than two decades, said no one could precisely say what was responsible for the price hike. He said a bag now costs between N3,650 and N3,700, depending on the brand, as against last year, when the price was N2,700, adding that the development had affected patronage. “Some times ago, we were selling about 4000 bags weekly, but today, we hardly sell 1500 bags per week,” Muhammed said.

 

 

 He also blamed some dealers for manipulating the price in the market. Another dealer, Musa Musa, told NAN that his sales had dropped by about 50 per cent. Some customers, mostly private resident developers and operators of block industries in Jigawa, lamented that the price hike had affected their businesses. Shuaibu Kabiru, a block moulder, said he had been forced by circumstances to increase the price of his blocks by 15 per cent. Alhaji Sani Ibrahim, a private residential developer, said he had been delaying his construction project for a very long time, believing the cement price would drop. On his part, a Builder, Mr Garba Auwwal, attributed the hike in the price of building materials, including Cement, to the outbreak of COVID-19. According to him, the COVID-19 pandemic has made many industries trim down the workforce, thereby reducing the number of goods being produced, with a corresponding hike in price. Auwwal also said the restrictions of movement of goods and services due to the pandemic, affected commodity price. He suggested the establishment of a body that would regulate the prices of building materials, including cement.(NAN)