High Cement Cost, Importation of Artisans Worries FG

01 May 2012

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Minister of Trade and Investment, Olusegun Aganga

By Crusoe Osagie

The Minister of Trade and Investment, Dr. Olusegun Aganga, has echoed the Federal Government’s worry over the rising cost of cement and the importation of artisans for construction works in the country.

He spoke during an interactive session at the recent Lagos Economic Summit and remarked that Nigeria has moved from a country that produced 2 million metric tonnes of cement in the year 2000 to a country that now has the installed capacity to produce 27 million tonnes of cement.

He also said that before the end of the year Nigeria would launch the largest cement producing plant in the world, which are signs that the country has made remarkable progress in the cement sector.

Aganga further said that other progresses recorded in the sector include the country’s ability to save foreign reserve from the amount hitherto spent on cement importation besides creating more jobs and attracting about six billion dollars’ worth of investment into the country.

He remarked that having focused on and achieved availability as part of government’s promise, “what is now left to achieve is affordability.

“I monitor the prices of cement in at least 15 locations every week, I ask for it, I get it and I monitor it because I want to know the impact of demand and supply and I also hold meetings with all the manufacturers of cement; with the most recent being in March this year,” he said.

The minister however expressed worry that the price was going up and when that happens, government wades in to find out what the problems are and decide what should be done. “I also understand that the ex-factory price today is about N1,500 but that is not what people are actually buying it,” he added.

He revealed that part of the reason why the price of cement had not come down was that though the installed capacity was 27 million metric tonnes, but because of the initial teething problems likely at a just-launched plant, it takes some time before they can start firing. However, he noted that this was just for the first half of the year because it was a temporary challenge.

“So we understand some of these temporary challenges. Another challenge they are having, has to do with is gas and diesel and we are also working towards resolving the problem of gas and the Minister of Petroleum has taken some initiatives in that direction that will have a positive impact on the cost of production,” he said.

He noted that gypsum, which is also another raw material for the production of cement, has received government’s attention and the duty for it has been further reduced by five per cent. “I have instructed the full implementation of that and as soon as that takes effect, the producers will have some reduced cost in production.

“So we are monitoring the situation and so far we have been able to achieve availability, it is now for us to get it right with affordability. The manufacturers themselves are also disturbed by the very high profit margins of middle men and we are trying to see how the price can be dropped to less than N1,400,” he said.

The minister also revealed that the construction industry was growing at the rate of 12 per cent per annum in the country, with less than 0.4 per cent contribution to GDP.

He said a research has shown that in the next 20 years there are three countries that would experience significant growth in infrastructure; namely China, India and Nigeria.

“And we are talking in terms of road, rail, and housing. The reason for the poor contribution to the GDP is because we import artisans such as electricians, tillers and plumbers, which should not be the case because we are looking to develop our areas of comparative advantage and link that to industrialisation,” he said.

He said government was planning to put in place a practical vocational skill development programme, like it was done in Brazil where they turn out between two to four million graduates every year.

“We are studying what Brazil did and we are looking at establishing that kind of institute here in Nigeria so that right from the age of 14 our youths can go to such schools which will be private sector driven, backed up with government policies for apprenticeship and work placement  programmes,” he stated.

He said at the completion of the practical-oriented programmes, graduates would have acquired the required skills to make motor vehicle parts and some can go on to become mechanical engineers, adding that it would also be a way of promoting Small Medium Enterprises.

He said that it was the strategy being adopted by government going forward and today that MoU has been signed with Brazil. “We have also been to Germany and spoken to the Germans because there are also areas of agricultural technology where Germans are very competent,” he added.

The minister said soon Nigerian artisans would become trained and better qualified to handle the country’s construction and automobile engineering needs and there would be no need to continue bringing in foreign artisans.

Tags: Business, World, Featured, cement, Artisans, FG

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