FCCPC Probes Nigeria’s Cement Industry Over Possible Anti-Competitive Practices
FCCPC Probes Nigeria’s Cement Industry Over Possible Anti-Competitive Practices
The Federal Competition and Consumer Protection Commission (FCCPC) has commenced an investigation into Nigeria’s cement industry following complaints over rising prices of the building material.
The commission said the investigation followed a three-month cross-border study conducted by its Anticompetitive Practices Department to examine conditions in the Nigerian cement market.
According to the FCCPC, its preliminary findings raised concerns that prevailing cement prices may not be fully explained by legitimate production and market costs.
The commission said Nigeria has substantial limestone deposits and installed cement production capacity estimated at between 60 million and 65 million metric tonnes annually, compared with domestic consumption estimated at about 25 million to 30 million tonnes.
It said industry participants had identified energy costs, naira depreciation and its impact on imported machinery and spare parts, as well as transportation and logistics, among factors contributing to cement prices.
The FCCPC said it is testing these explanations against verified information on production costs, pricing, capacity utilisation and other market conditions.
The investigation will determine whether prevailing cement prices are driven by legitimate market conditions or whether there is evidence of coordinated conduct, abuse of market power, restriction of domestic supply or other anti-competitive practices.
The commission has issued Notices of Commencement of Investigation and Summons to Produce to key industry players, requesting information on pricing methods, production, capacity utilisation, exports and commercial relationships.
FCCPC Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said the investigation was necessary because of cement’s importance to housing, infrastructure development and the wider economy.
The FCCPC stressed that the investigation is not aimed at preventing businesses from making legitimate profits, but at determining whether competition in the cement market is functioning in accordance with the law.
