Dangote vs others: Tackling competition in Nigeria’s cement industry
Nigeria's cement price problem. Source: Stears Business

A general discussion around cement in Nigeria revolves around one name—"Dangote". There is envy around the name for its wealth from manufacturing operations, including cement production. Most times, though, the name is "dragged" for the unsteady and rising prices of the limestone byproduct. 

Building developers and even Nigerian lawmakers have blamed their projects' high cost and slow expansion on rising cement prices. Last year, the price of a 50 kg bag of cement rose by 44% from ₦2,500 to ₦3,600. Today it is about ₦4,000.

The belief for many is that we have rising cement prices because Dangote Cement, which has the largest market share (60%) in the industry, has no competition. But it has competitors, both foreign and local, that are vying for market share. So how come their presence does not lead to competitive pricing?

 

Understanding oligopolies

Let's go back to ECON 101 to explain pricing in a market structure

Don’t limit your understanding. Join the Premium community to continue reading.

Adesola Afolabi

Adesola Afolabi

Read Latest

Economies are gaining from carbon taxes, but not Nigeria

PREMIUM - 24 SEP 2021

Nigeria is experiencing a housing bubble and it's absurd

PREMIUM - 23 SEP 2021

Nigeria’s health infrastructure and its funding problem

PREMIUM - 22 SEP 2021

Battle for Benin Bronzes: Should Nigeria fight for their return?

PREMIUM - 21 SEP 2021