Nigerian billionaire industrialist Aliko Dangote has offered fresh insight into why cement produced in Nigeria often costs more locally than it does in international markets, attributing the disparity largely to the country’s heavy tax structure and regulatory environment.
Speaking in an exclusive interview with Business Insider Africa, Dangote explained that while Nigeria has made significant progress in local cement manufacturing capacity, fiscal policies imposed on domestic sales continue to push prices upward for Nigerian consumers. According to him, cement exported from Nigeria benefits from extensive tax exemptions that do not apply to products sold within the country, creating a structural price imbalance.
The issue has attracted growing public scrutiny in recent years, particularly as Nigerians observe locally produced cement being sold cheaper in foreign markets than at home. Dangote noted that this situation is not driven by profiteering alone, but by the fundamental way exports are treated differently under Nigeria’s tax system.
Why exports are cheaper
Dangote explained that cement meant for export is largely shielded from several layers of taxation and statutory deductions that manufacturers must pay when selling domestically. As a result, the cost base for exported cement is significantly lower, allowing Nigerian products to compete effectively with cement from countries such as Turkey, Russia, and China.
“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,” Dangote said. “In export, I’m saving a lot of money. I’m not paying 30% income tax, I’m not paying 2% education tax, I’m not paying 1% health levy, I’m not paying 7.5% VAT, and I’m not paying 10% withholding tax.”
According to him, these exemptions are deliberate policy tools designed to encourage exports and improve Nigeria’s competitiveness in global markets. However, the unintended consequence is that domestic buyers are left to absorb the cumulative burden of these taxes and levies, which ultimately reflect in higher retail prices.
Structural challenges for local consumers
Dangote stressed that while expanding local manufacturing is important, it is not a silver bullet for lowering prices if the broader fiscal and regulatory framework remains unchanged. He argued that Nigerian consumers effectively pay more because domestic manufacturers are required to shoulder multiple statutory obligations that do not apply to export-oriented sales.
He added that this structural imbalance highlights the need for a broader conversation around tax harmonisation, regulatory efficiency, and cost reduction across the manufacturing value chain. Without reforms in these areas, local production alone may not be sufficient to deliver affordable prices to end users.
Policy concerns and government reactions
Concerns about the rising cost of cement in Nigeria have been echoed by policymakers over the past two years. In February 2025, the Minister of Works, David Umahi, urged cement manufacturers to reduce prices to around N7,000 per 50kg bag. He cited improved macroeconomic conditions at the time, including a more stable naira exchange rate of about N1,400 per dollar and lower petrol prices, as justification for downward price adjustments.
Umahi criticised prevailing market prices of about N9,500, noting that manufacturers had increased prices sharply when the naira was close to N2,000 to the dollar but had failed to reverse those increases after currency conditions improved. He warned that persistently high cement prices could undermine the government’s infrastructure agenda, particularly projects requiring Continuously Reinforced Concrete Pavements, and might push contractors back toward asphalt alternatives.
Earlier, in February 2024, the Minister of Housing and Urban Development, Musa Dangiwa, also raised alarm over cement pricing trends. He accused manufacturers of exploiting foreign exchange volatility to justify steep price hikes, noting that cement prices had jumped from about N5,500 to nearly N10,000 within a short period. Dangiwa cautioned that such increases threatened the viability of federal housing programmes targeted at low- and middle-income earners.
Where prices stand today
Despite these interventions and public debates, cement prices in Nigeria remain elevated. A 50kg bag of cement currently sells for between N9,500 and N10,200 across major markets, depending on location and brand. Industry observers say prices are unlikely to fall significantly unless there is meaningful relief on taxes, energy costs, transportation bottlenecks, and regulatory charges.
Dangote’s comments have reignited discussions around the balance between export incentives and domestic affordability. While export-driven growth remains vital for foreign exchange earnings, stakeholders argue that aligning fiscal policies to reduce the cost burden on local consumers will be critical to making cement—and by extension housing and infrastructure—more affordable for Nigerians.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
