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Despite Nigeria’s abundant limestone deposits and significant cement production capacity, the rising cost of cement and other building materials continues to put pressure on businesses, construction companies and consumers.
The situation has raised questions about how Nigeria can leverage its raw materials and production capacity to serve both the domestic market and growing demand across Africa.
Trade expert, Dr John Isemede, said the debate around cement prices and exports should go beyond comparing the price of cement in Nigeria with prices in neighbouring countries.
According to him, export competitiveness is determined by a combination of production costs, incentives, logistics, trade agreements, duties, taxes, market conditions and the business environment in both the exporting and importing countries.
Isemede explained that the structure under which a manufacturer operates could significantly influence export costs.
He identified various possibilities, including a producer operating within a free zone, a smaller company outside a special economic zone, or a factory operating outside such arrangements but with a dedicated export line.
The trade expert said the nature of the export operation, including whether production is specifically structured for export, could affect the final cost and competitiveness of the product.
He also identified the ECOWAS Trade Liberalisation Scheme (ETLS), rules of origin, transportation by sea, rail or road, shipment volumes, product quality and payment arrangements as important considerations for manufacturers seeking to enter foreign markets.
He noted that the price paid by a foreign buyer should not simply be compared with the retail price paid by a Nigerian consumer, stressing that an exporter works from the factory-gate cost and adds the expenses associated with moving the product to the destination market.
According to him, port operations, dedicated exit points, border procedures, customs clearance and the availability of efficient transport corridors can either improve or undermine Nigeria’s export competitiveness.
Incentives alone cannot fix export challenges
Isemede also highlighted the role of government support and export incentives in improving the competitiveness of Nigerian products.
Nigeria has historically operated export-support mechanisms such as the Export Expansion Grant (EEG), which was designed to encourage non-oil exports and strengthen the competitiveness of Nigerian products in international markets.
However, he said incentives alone would not be enough if the wider business environment continued to impose additional costs on exporters.
He cited delays at checkpoints, unofficial payments along highways, inefficient port processes and cumbersome border procedures as some of the factors capable of increasing the cost of goods before they reach foreign buyers.
He added that exporters must understand not only Nigeria’s tax and trade policies but also the import policies of destination countries, particularly where those countries offer incentives to buyers or apply preferential duties to certain products.
Export is more than moving goods across borders
Isemede challenged what he described as a simplistic understanding of export, arguing that exporting involves a chain of decisions and procedures that begins long before a product leaves the factory.
“Export is not a bus rather a process,” he said.
He stressed that Nigeria must strengthen the systems that determine the cost of producing and moving goods, noting that every country has its own trade and foreign policies.
According to him, trade liberalisation agreements and World Trade Organisation rules do not automatically determine the price at which a product will sell in a particular market.
For cement manufacturers, he said, export competitiveness requires efficient production, predictable regulations, reliable energy, effective transport infrastructure, competitive ports and a business environment that allows exporters to accurately calculate their costs.
He also emphasised the importance of appropriate Incoterms, which define the responsibilities of exporters and buyers for transportation, insurance, customs clearance and other costs at different stages of an international transaction.
Why export despite high domestic prices?
The question of why manufacturers should be encouraged to export when cement remains expensive in Nigeria remains central to the debate.
Isemede said the answer lies in distinguishing domestic retail pricing from export costing.
He explained that a manufacturer does not necessarily determine export competitiveness by taking the Nigerian retail price and applying it directly to an international market. Instead, the producer considers the actual cost of production, applicable incentives, logistics, duties in the destination country and prevailing market conditions.
He identified three broad considerations: the cost of production in Nigeria and duties payable in the destination market; the level of market saturation in Nigeria; and the risk of dumping.
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He said access to multiple markets could provide manufacturers with additional revenue streams, reduce dependence on the Nigerian market and spread commercial risks.
Isemede gave an example of a product selling for about N12,000 in Nigeria, saying it could become highly attractive in another country where incentives exist, particularly where local production is limited or unavailable.
“In such a market, the effective cost could be significantly lower, giving the producer a strong competitive advantage,” he said.
He urged manufacturers to focus on developing foreign markets and securing market share rather than viewing exports simply as the movement of goods out of Nigeria.
“What the producer should be looking at is developing the foreign market and securing a substantial share of that market,” he said.
“Once we are able to sell not only in Nigeria but also in Togo and other neighbouring countries, we are expanding our opportunities and, importantly, spreading our business risk.
“If the Nigerian market becomes difficult, sales from other countries can help sustain the business.
“This is not rocket science, and it is not something we should treat as an elementary or optional idea. For us, developing the export market is a must.
“The business environment remains a major challenge. It’s sad that amidst the opportunities presented by exports, Nigeria’s manufacturers continue to face high operating costs.
Energy, transportation, taxes and levies, port charges, financing costs, infrastructure deficits and regulatory uncertainty can all increase the cost of producing and moving goods.
These challenges are particularly significant for cement because of the product’s weight and transportation requirements.
Efficient roads, rail connections, ports and border processes are therefore critical to ensuring that Nigerian cement can compete in regional markets”, he added.
The issue, Isemede argued, is not simply whether Nigeria has enough limestone or cement production capacity, but whether the country can create the conditions that allow manufacturers to produce and move cement efficiently enough to serve both domestic and international markets.
AfCFTA and Nigeria’s cement opportunity
The African Continental Free Trade Area (AfCFTA) offers Nigerian cement manufacturers an opportunity to expand beyond the domestic market and develop regional supply chains.
However, Isemede noted that market access on paper does not automatically translate into successful exports.
Manufacturers must still comply with rules of origin, meet destination-market requirements, understand customs procedures, manage logistics and remain competitive in terms of both price and quality.
For Nigeria, the challenge is therefore to convert its substantial cement production capacity and limestone resources into genuine export competitiveness.
The opportunity is significant, but without improvements in the broader business environment, export incentives alone may only address part of the challenge.
The debate over cement exports should consequently move beyond whether Nigeria should export. The bigger question is whether the country can produce, transport and export competitively while keeping the domestic market adequately supplied and affordable.
Ultimately, trade policy, industrial policy, infrastructure, taxation, diplomacy and business-environment reforms will determine whether Nigeria can turn its cement production capacity into a stronger presence in the African market.
Isemede further noted that there are several areas where Nigerian exporters can reduce costs when selling cement outside the country.
VAT: VAT does not form part of the cost of an export transaction, giving exporters an advantage in the international market.
Local advertising: Exporters do not need to bear the cost of domestic advertising campaigns, including above-the-line and below-the-line advertising such as television and other local media campaigns, when targeting overseas markets.
Multiple levies and charges: Exporters can also avoid some of the multiple levies and charges imposed on businesses operating in different locations within Nigeria.
Local area boys and checkpoints
Costs associated with unofficial payments to local groups and the numerous checkpoints encountered across the country can add significantly to the cost of moving goods domestically and should be eliminated or reduced to improve export competitiveness.
Pressure for immediate profits MSMEs should avoid the mindset of expecting to make profits from the first day of operation. Building a sustainable export business requires patience, investment and the ability to compete on price and quality over time.
