The President of Dangote Group, Alhaji Aliko Dangote, has explained the reasons behind the price difference between cement sold locally in Nigeria and the same product exported to other countries.
Speaking in a report published by Business Insider Africa, Dangote attributed the high cost of cement in Nigeria to excessive taxes, levies, and regulatory pressures, which he said significantly increase production and selling costs within the country.
According to him, this situation has resulted in the unusual scenario where cement produced in Nigeria is often sold cheaper abroad than it is within the domestic market, to the disadvantage of Nigerian consumers.
Exported Cement Benefits from Tax Exemptions
Dangote explained that the noticeable price gap exists largely because cement meant for export enjoys several tax exemptions and incentives that do not apply to products sold locally.
He stated that exporters are relieved from paying a wide range of taxes and statutory deductions, making production costs far lower compared to cement sold within Nigeria.
Specifically, he noted that exported cement is not subject to income tax, education tax, health levy, value-added tax (VAT), and withholding tax, all of which add significant costs to domestically sold cement.
“These exemptions allow Nigerian cement to compete effectively with international producers from countries such as Turkey, Russia, and China,” Dangote noted.
He further explained that the incentives are designed to help Nigerian products remain competitive in the global market, even though the unintended consequence is higher prices for local buyers.
“When you look at my invoice, the cement I export is cheaper than the one I’m selling domestically, because that’s how exports work.
“In export, I’m saving a lot of money, I’m not paying 30% income tax, I’m not paying 2% education, I’m not paying 1% health, I’m not paying 7.5% VAT, and I’m not paying 10% withholding tax,” he added.
Domestic Consumers Bear the Burden
Dangote stressed that under the current fiscal and regulatory framework, Nigerian consumers ultimately bear the burden of these multiple taxes and inefficiencies.
He pointed out that while local manufacturing is important for economic growth and job creation, it alone cannot solve the problem of high prices if the tax and regulatory environment remains unchanged.
According to him, meaningful reduction in cement prices for Nigerians would require a review of government policies, levies, and operating costs affecting manufacturers.
Currently, prices of cement in Nigeria range between ₦10,200 and ₦10,500, depending on location, availability, and transportation costs.
The businessman concluded by calling for a more balanced policy approach that supports both export competitiveness and affordability for domestic consumers.