Centre for the Promotion of Private Enterprise (CPPE) has expressed concern over the recent remarks on the floor of the House of Representatives on cement price, which portrayed cement manufacturers in bad light.
The Director of the centre, Dr Muda Yusuf noted that cement manufacturers were disparaged, denigrated and portrayed as deliberately inflicting pains on Nigerians by arbitrarily increasing the price of cement.
He also pointed out that members of the House alleged that the manufacturers were exploitative as they engaged in arbitrary fixing of cement price.
” Some members even described the manufacturers as unpatriotic, adding that these were narratives on the floor of the house which considered to be most unfair to investors in the cement sector, especially when the perspectives of the cement manufacturers had not been heard by the members of the house .
The CEO viewed that most of the remarks at the session were capable of inciting the public against the cement manufacturers and putting their huge investments at risk.
” It is a dangerous thing to do, given the huge stake they have in the Nigerian economy and their enormous contributions to the economy. We plead with the leadership of the house to ensure moderation in the use of language to avoid adverse consequences for investors in the economy, going forward.
It is even more troubling that the members have not listened to the manufacturers before rushing to judgment and castigating the manufacturers. “
He noted that such weighty allegations should be premised on painstaking study, empirical facts and evidence.
” For an economy seeking to industrialize, attract investors and create jobs, such commentaries represent negative signaling.
“Principles of fairness demands that the cement manufacturers should be given an opportunity to tell their own story before members could come to fair conclusion and judgement. But regrettably, they have been judged publicly, before giving them the opportunity to present their own side of the story. We believe this is a breach of the norms and standards of fairness and equity.
It is even more painful because the major players in the sector are indigenous companies making giant strides amidst a very difficult operating environment including the multitudes of macroeconomic and structural headwinds.
Lamenting the harsh business environment affecting production cost of manufacturers, he explained that cement production is highly energy intensive with gas being the major energy source.
“Gas is priced in dollars for manufacturers in the country and they sell their products in naira. This is a major predicament for domestic manufacturers. The implication of that for production cost is better imagined, especially in the light of the plunge in the value of the naira.
“The logistics cost of cement distribution is humongous, given the escalating cost of diesel and the state of the roads. Exchange rate depreciation is taking a huge toll on the cost of imported components of production inputs, including spare parts and machineries. Cost of fund is mounting as the CBN continues its aggressive monetary policy tightening. Latest headline inflation for February was 31.7%.”
He noted that all these are variables which are not within the control of the manufacturers and which have profound impact on production and operating cost.
“It is important to stress that matters of this nature requires painstaking and thorough investigation to determine the pricing dynamics and the ramifications of the factors driving prices.
“This is critical to avoid hasty and emotional conclusions.”