Center for the Promotion of Private Enterprise (CPPE) has condemned the House of Representatives’ remark on cement price, which described manufacturing as exploitative and engaging in arbitrary fixing of prices.
The CPPE said that this has portrayed cement manufacturers in very bad light, and can incite the public against them, as well as putting their huge investments at risk.
The CPPE described the narrative as dangerous to the huge stake cement manufacturers have in the country, as well as their enormous contributions to the economy.
The Chief Executive Officer of CPPE, Dr. Muda Yusuf, pleaded with the leadership of the House to ensure moderation in the use of language to avoid adverse consequences to investors in the economy going forward. The CPPE boss said that what is more troubling was that the House did not listen to the manufacturers before rushing to judgment and castigating them.
Yusuf noted that the lawmakers disparaged, denigrated and portrayed the manufacturers as deliberately inflicting pains on Nigerians by arbitrarily increasing the price of cement.
He said that such weighty allegations should be premised on painstaking study, empirical facts and evidence, as well as thorough investigation to determine the pricing dynamics and the ramifications of the factors driving prices.
According to the CPPE boss, cement production is highly energy intensive, with gas being the major energy source. Yusuf noted that gas is priced in dollars for domestic manufacturers in the country, while they sell their products in naira.
He also highlighted the logistics cost of cement distribution, which, he said, is humongous, given the escalating cost of diesel and the state of the roads.
Yusuf also pointed out that the exchange rate depreciation is taking a huge toll on the cost of imported components of production inputs, including spare parts and machineries. He said the cost of funds is mounting as the Central Bank of Nigeria (CBN) continues its aggressive monetary policy tightening.
The CPPE boss also emphasised on the headline inflation for February (31.7 per cent), noting that all these variables are not within the control of the manufacturers. So, these have a profound impact on production and operating cost.
Yusuf stated that with the current ex-factory price of cement by the major players less than N7,000 per bag, the pricing issues and the culprits could also be within the cement distribution chain over which the manufacturers have limited control.
