Factors Responsible for the Rising Price of Cement in Nigeria
Factors Responsible for the Rising Price of Cement in Nigeria
INTRODUCTION
BACKGROUND OF THE STUDY
The markets for cement constitute one of the fundamental products in the building and construction industry. The fear of property developers and prospective homeowners lies on the fluctuating nature of the prices of cement in the market. The current price of cement has escalated from N1, 600 to N2, 700 depending on the location. This has also led to the increase in the price of concrete blocks from N180 and N200 for a six inch and nine-inch block respectively. The industry leader dangote cement which made an announcement of a slash in price has not kept to its bid thereby, worsening the situation. According to dangote, the inability of the firm to maintain a low price is as a result of the high exchange rate of the naira to the dollar, dwindling capacity utilization of their plants, poor gas supply (AGO), high cost of power. It is stated that even though the government has banned the importation of foreign cement the prices of cement has remained on the high side.
Other reasons for the increment are the high cost of diesel, high cost of transportation, shortages of industrial fuel such as low pour fuel (LPFO), automotive gas oil (AGO) and natural gas. The study seeks to investigate the factors responsible for the rising price of cement in Nigeria.
STATEMENT OF THE PROBLEM
The inability of Nigerians to afford the purchase of cement due to increases in the price of cement has resulted in the abandonment of many construction works especially personal houses under construction. High cost of production, falling standard of the naira, and the rise in freight charges, dwindling capacity utilization of their plants, poor gas supply (AGO), and high cost of power are some of the reasons for the increase. It is stated that even though the government has banned the importation of foreign cement the prices of cement has remained on the high side. Other reasons for the increment are the high cost of diesel, high cost of transportation, shortages of industrial fuel such as low pour fuel (LPFO), automotive gas oil (AGO) and natural gas. The problem confronting the study is to appraise the factors responsible for the rising price of cement in Nigeria.
OBJECTIVES OF THE STUDY
The Main Objective of the study is to appraise the factors responsible for the rising price of cement in Nigeria; The specific objectives include:
- To determine the relevance of cement in Nigeria.
- To appraise the effect of the rising price of cement in Nigeria.
- To determine the factors responsible for the rising price of cement in Nigeria.
RESEARCH QUESTIONS
- What is the relevance of cement in Nigeria?
- What is the effect of the rising price of cement in Nigeria?
- What are the factors responsible for the rising price of cement in Nigeria?
STATEMENT OF THE HYPOTHESIS
Ho1: There is no significant effect of the rising of prices of cement in Nigeria.
SIGNIFICANCE OF THE STUDY
The need for the availability and affordability of cement in Nigeria cannot be overemphasized. Therefore, the rising cost of cement has constituted a fundamental issue which requires urgent attention so as to proffer a lasting solution. The study shall therefore serve as veritable source of information to stakeholders to proffer interventions which will address the problem.
SCOPE OF THE STUDY
The study focuses on the appraisal of the rising price of cement in Nigeria.
LIMITATION OF THE STUDY
The study was confronted with logistics and geographical factors.
DEFINITION OF TERMS
FINANCIAL PERFORMANCE DEFINED
This is the measure of the firm’s financial returns or goals through the use of evaluation method or financial indicators.
RETURN ON INVESTMENT DEFINED
The return on investment defines the firm’s efficiency in the utilization of the invested capital. This ratio is determined as net profit after tax divided by total paid in capital.
CUSTOMER SATISFACTION DEFINED
Meeting or exceeding customer expectations.