Why My Cement Is Expensive in Nigeria but Cheaper Abroad – The Dangote’s Explanation -By Richard Nathan Sani

The persistent rise in cement prices in Nigeria has sparked widespread public debate, especially as Nigerians observe that the same Dangote Cement sells at significantly lower prices in some foreign markets. This apparent contradiction has led to accusations of unfair pricing and exploitation. However, Aliko Dangote, President of Dangote Group, argues that the issue goes beyond profit-making and is deeply rooted in Nigeria’s structural and economic challenges.

High Cost of Energy and Power Supply

One of the biggest factors driving cement prices in Nigeria is the cost of energy. Cement production is highly energy-intensive, requiring constant electricity and heat. In many countries where Dangote Cement is cheaper, industries enjoy stable and affordable power from national grids. In contrast, Nigerian manufacturers rely heavily on diesel and gas-powered generators due to unreliable electricity supply. The high cost of fuel significantly increases production expenses, which are inevitably passed on to consumers.
Transportation and Poor Infrastructure
Another major challenge is transportation. Moving raw materials like limestone and finished cement across Nigeria is expensive due to poor road networks, insecurity, and long travel times. In some foreign countries, efficient rail systems, good roads, and functional ports reduce logistics costs. In Nigeria, frequent vehicle breakdowns, road damage, and security risks add extra costs that inflate the final price of cement.

Foreign Exchange and Import-Related Costs

Although Dangote Cement is produced locally, several key inputs such as spare parts, machinery, and certain additives are imported. Fluctuations in the foreign exchange market, coupled with the depreciation of the naira, make these imports far more expensive. Abroad, where currencies are more stable, production planning and cost control are easier, resulting in lower prices.

Taxes, Levies, and Regulatory Burdens

Dangote has also pointed to the multiple taxes and levies imposed by federal, state, and local governments. Manufacturers in Nigeria often face overlapping charges, regulatory fees, and compliance costs that do not exist—or are minimal—in other countries. These financial burdens raise operational costs and affect product pricing.

Economies of Scale and Market Stability Abroad

In several foreign markets, Dangote Cement operates in more predictable economic environments with steady demand, lower inflation, and clearer regulations. These conditions allow for better economies of scale and price stability. Nigeria’s volatile economic climate, marked by inflation and policy uncertainty, makes it harder to maintain low and stable prices.

The Bigger Picture

Dangote argues that the higher price of cement in Nigeria reflects broader systemic issues rather than deliberate price discrimination. According to him, addressing power supply, infrastructure decay, forex instability, and regulatory inefficiencies would naturally lead to cheaper cement prices. Until these structural problems are resolved, local production costs will remain higher than in many foreign markets.

Richard Nathan Sani