FCCPC probes cement makers over possible price manipulation

The Federal Competition and Consumer Protection Commission (FCCPC) has launched an investigation into Nigeria's cement manufacturers, alleging potential price manipulation in the market. The probe follows findings from an industry-wide investigation, driven by concerns about high retail prices compared to other markets, despite Nigeria's abundant limestone deposits, significant production capacity, and surplus installed capacity relative to domestic consumption.

The FCCPC's investigation stems from widespread grievances over the steep cost of cement, a crucial component of Nigeria's construction industry.

During a three-month cross-border study, the Commission's Anticompetitive Practices Department (ACP) collected preliminary field reports following complaints from the public. All major cement manufacturers in Nigeria cooperated with the Commission by sharing their records, except one. In comparison, Kenya, with only 58.6 million people (76% fewer than Nigeria), has a domestic cement demand of around 9.3 million metric tonnes per year in 2025, with a retail price of $5.40 (N7,344) in Nairobi.

Nigeria, in contrast, has seen a significant rise in the retail price of a 50kg bag of cement during the first half of 2026, despite having excess production capacity that should have exerted downward pressure on domestic prices in a competitive market.

The Commission is examining potential contributing factors, including energy costs, the depreciation of the Naira impacting imported machinery and spare parts, and transportation and logistics expenses. FCCPC Director Ondaje Ijagwu stated that the weight of preliminary findings warrants continuing the investigation. FCCPC Executive Vice Chairman/CEO Tunji Bello explained that the probe is aimed at ensuring market conditions that significantly affect consumers and the economy are determined by genuine competition rather than unlawful restrictions. The investigation does not dictate commercial decisions but protects the competitive process.

Nigeria's cement sector generated a combined N3.2 trillion in revenue during the first half of 2026, driven by rising housing developments, construction activity, and infrastructure projects. Dangote Cement shares have dropped 6% over the past week but remain up 68% over the past year, trading at a price-to-earnings ratio of about 14.4x, with current valuations at roughly 17x earnings.

These elevated valuations indicate that investors still believe in sustained revenue and profit growth, reflecting expectations that Nigeria's construction boom and infrastructure investments have significant potential for expansion.