Middlemen induce cement scarcity, price hike in North-East ─Survey

*Cement dealers and consumers in North-East have condemned the activities of middlemen, whom they stated have capitalised on the development to further worsen the situation in the region

Alexander Davis | ConsumerConnect

As a far-reaching effect of the outbreak of COVID-19 in the country, some residents of North-East Nigeria have attributed the relative scarcity and rise in cement price to the widening gap between the demand and supply of the building and construction product.

A survey indicated an average of 40 percent increase in cement price in Bauchi, Gombe, Borno, Yobe, Adamawa Jigawa States, according to the News Agency of Nigeria.

Respondents to the survey said several challenges affected production in factories, one of which is the outbreak of COVID-19, thereby reducing supply, while demand kept increasing.

The report stated that some of the respondents condemned the activities of middlemen, whom they said capitalised on the unfortunate development to further worsen the situation.

They called on government to intervene by checking the unwholesome activities of some dealers and middlemen.

Others, however, blamed the hike on high cost of transportation and other sundry activities associated with the business of procurement and sales of Cement in the country.

Malam Ibrahim Sanusi, a cement dealer at the Gombe main market described the hike as “outrageous” when compared with the price of same commodity the previous year.

Sanusi said in December last year, he bought a bag of Dangote brand for N2,400 and sold it for N2, 500, same with Ashaka brand.

According to the product dealer, “now, we buy Dangote Cement for N4, 000 from their depot in Gombe and sell for N4, 200, while the company price of Ashaka Cement is N3,900, and the retail price is N4, 000.”

Alhaji Bello Bose, Chairman of Gombe State Chapter of Block Molders Association, also remarked that the hike in price might be deliberate.

The Chairman said: “Since October 2020, there had been scarcity of Cement in Gombe state, and now, the price has been hiked. This, to me, is deliberate.”

Bose disclosed that many of his Association’s members would have left the trade if they had alternatives, and therefore called on government to intervene.

Efforts at securing comment from Management of Ashaka Cement Company in Gombe state on the cause of the price hike did not produce results.

Mr. Sarki Isa, Head of Corporate Communications of Ashaka Cement Company, who promised to get back to the source after consultations with concerned departmental heads, did not do as of the time of filing the report.

In Bauchi, Malam Bako Mohammed, Chairman of Railway Cement Depot, said that low production by cement manufacturers was responsible for the current high price in the region.

Mohammed, however, said a bag that was sold for N2,500 in 2020 is now N3,800.

The low production had led to non-supply of the product to some retailers who had paid for it months ago, he stated.

The Cement Depot Chairman noted that the situation has also forced retailers who have little of it from the old stock to determine the price.

Mohammed said: “When we try to ask questions, the manufacturers would say that the Value Added Tax (VAT) being deducted by the government on the products is too high and that is why they are not producing much.

“Before, we used to go to Ashaka cement in Gombe state to procure Cement, but now, even Ashaka is not producing.”

He lamented: “Now, because of the lack of supply, we do go as far as Obajana in Kogi, or Benue state, to buy the product.

“The situation is worrisome; I had paid for my consignment since November last year but up till now, I am yet to receive my Cement.”

According to him, other circumstances that contributed to the hike in cement price included cost of transportation, loading and off-loading.

He urged the government to discuss with manufacturers on how to address the problem.

“In the past, government had done it and the price reduced drastically; the present administration can equally do same,” he said.

Alhaji Abubakar Lawal, a customer, who recalled buying a bag of Cement at the rate of N2,500 last year, said same now costs N3,700.

On the cause of the hike in the price, he said he had been told producers were servicing their machines, as such had stopped production.

“For that reason, production decreased while demand is still the way it used to be, or even higher, resulting in price hike,” Lawal said.

Alhaji Sama’ila Muhammed, a Cement Dealer in Damaturu, also attributed the price hike to the drastic reduction in supply.

Muhammed stated: “One of the reasons for the hike is that demand for the product is much higher than the supply of the commodity.”

He also urged intervention of the government to close the current gap between demand and supply, just as he maintained that increase in ongoing capital projects nationwide, is another factor.

Alhaji Usman Kasim, a Cement Dealer in Yola, as well observed that increase in price had to do with activities of middlemen, major Suppliers/Dealers, and some top management staff of Cement companies.

Kasim said: “I think one of the factors responsible for the increase in price, is the activities of middlemen.

“These middlemen are powerful; some of them have connection with top Management officers of Cement Industries.

“The only thing that will stabilise the price is for the Cement industry owners to check the activities of some of their top management staff.”

In his response to the development in his state, Mr. Sunday Haruna, member, Adamawa Builders Association, observed that due to hike in price of cement, building activities have reduced drastically.

He stated: “Many people visit our Headquarters on daily basis to hire our members.

“Now, we have observed people are no longer coming to patronage our services, as usual, and we believe there is a link with the present high cost of Cement.”

A Maiduguri-based builder, Ibrahim Khalifa, who called for intervention of government, urged the state government to resuscitate the moribund Borno Burnt Bricks factory.

“Many estates in Maiduguri were constructed with bricks some years back.

“Construction with bricks does not require much cement and its structures last longer,” Khalifa said.

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