Why Cement Is Cheaper Abroad Than in Nigeria — Dangote Blames Taxes, Not Production Costs
By Naija247news
Business & Economy
Nigerian billionaire industrialist Aliko Dangote has offered a detailed explanation for why cement produced in Nigeria is often cheaper in foreign markets than at home, attributing the disparity to the country’s heavy tax burden and regulatory structure, rather than inefficiencies in local production.
In an exclusive interview with Business Insider Africa, Dangote said Nigeria’s fiscal framework imposes multiple layers of taxes and statutory levies on cement sold domestically, significantly inflating prices for Nigerian consumers. By contrast, cement exported from Nigeria enjoys broad tax exemptions, enabling it to compete favorably with products from global manufacturing hubs such as Turkey, Russia, and China.
The issue has sparked growing public debate as Nigerians grapple with soaring construction costs, even as the Federal Government pushes ambitious infrastructure and housing programmes. Critics have questioned why a commodity produced locally, using largely domestic raw materials, remains priced beyond the reach of many Nigerians while being sold more cheaply overseas.
Dangote said the difference becomes clear when the cost structure of each bag of cement is examined.
“When you look at my invoice, the cement I export is cheaper than the one I’m selling domestically, because that’s how exports work,” he explained.
“In export, I’m saving a lot of money. I’m not paying 30 per cent income tax, I’m not paying 2 per cent education tax, I’m not paying 1 per cent health levy, I’m not paying 7.5 per cent VAT, and I’m not paying 10 per cent withholding tax.”
According to him, these exemptions dramatically lower costs for export markets, while cement sold locally must absorb corporate income tax, VAT, sector-specific levies, and withholding taxes, costs that are inevitably passed on to consumers.
Dangote stressed that expanding manufacturing capacity alone will not bring prices down if Nigeria’s operating environment remains unchanged. Without meaningful tax and regulatory reforms, he said, manufacturers have little room to sustainably reduce prices, regardless of scale or efficiency gains.
His remarks come amid mounting pressure from policymakers who have repeatedly urged cement producers to slash prices. In February 2025, the Minister of Works, Senator Dave Umahi, called on manufacturers to reduce cement prices to about ₦7,000 per 50kg bag, citing a stabilising naira—then trading around ₦1,400 to the dollar—and declining petrol prices.
Umahi criticised prices hovering around ₦9,500, noting that manufacturers raised prices sharply when the naira weakened to nearly ₦2,000 per dollar, but failed to adjust them downward as the currency recovered. He warned that persistently high cement prices were undermining the government’s infrastructure plans, particularly concrete road projects designed for long-term durability.
The minister also cautioned that some contractors were considering a return to asphalt roads, which are cheaper upfront but less durable, a move that could increase long-term maintenance costs for the government.
Similarly, in February 2024, the Minister of Housing and Urban Development, Musa Dangiwa, accused cement manufacturers of exploiting foreign exchange volatility to justify steep price increases. Cement prices at the time had risen from about ₦5,500 to nearly ₦10,000 per bag, threatening affordability and government-backed housing programmes aimed at low- and middle-income Nigerians.
Despite these public interventions, market surveys show that cement prices remain elevated, with a 50kg bag currently selling for between ₦9,500 and ₦10,200, depending on location. The impact has rippled across the economy, driving up the cost of housing, private construction, and public infrastructure projects.
Dangote’s intervention reframes the debate, shifting focus from alleged pricing power by dominant manufacturers to Nigeria’s broader policy environment. While critics argue that market concentration plays a role, his comments underscore a deeper structural challenge: how overlapping taxes, levies, and regulatory costs often erode the benefits of local production, leaving Nigerian consumers to shoulder the burden.
As the government balances revenue generation with its goal of boosting industrial output and affordability, Dangote’s remarks add urgency to calls for a comprehensive review of fiscal policies that may be undermining domestic competitiveness and worsening Nigeria’s cost-of-living pressures.
Babatunde Akinsola ✔
Godwin Okafor is the Publisher & CEO of Naija247news Media Group LLC, an independent investigative news platform delivering accurate, data-driven reporting on Nigerian and global politics, economy, finance, and business. Founded in October 2010, Naija247news specializes in developmental journalism, providing timely insights and analysis to readers across Nigeria and the diaspora.
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