Aliko Dangote, President of the Dangote Group, has explained why cement produced in Nigeria is often sold at a higher price locally than in export markets. His comments, made public today, have drawn attention to structural cost issues within Nigeria’s manufacturing and fiscal environment.
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Background to the pricing difference
Dangote stated that the price difference is largely driven by taxes and regulatory charges imposed on cement sold within Nigeria. According to him, locally sold cement is subject to multiple levies, including company income tax, value added tax, education tax, and other statutory charges. These costs, he said, do not apply in the same way to cement exported outside the country.
He explained that export products benefit from government incentives designed to encourage foreign exchange inflows. As a result, the same cement produced in Nigerian factories can be sold at a lower price in neighbouring countries while remaining profitable for the producer.
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Impact on the local construction sector
The pricing structure has implications for Nigeria’s construction and housing sectors. Higher cement prices increase building costs, which are passed on to developers and final consumers. Industry participants say this has contributed to rising housing costs and slowed private sector construction activity.
Manufacturers argue that without a review of taxes and charges on locally consumed goods, domestic industries will continue to struggle with competitiveness. Some stakeholders believe that high production costs weaken demand and limit expansion in sectors linked to infrastructure and housing.
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Policy considerations and reactions
Dangote called for a review of fiscal policies affecting local manufacturers, noting that lowering internal cost pressures could support economic activity and job creation. While government authorities have not issued an official response, business groups are expected to raise the issue with relevant ministries and agencies.
