Nigeria has the largest single cement plant in sub-Saharan Africa — Dangote Cement Obajana, 16.25 million tonnes a year — and one of the highest cement prices on the continent. The conventional explanation (energy, logistics, naira weakness) accounts for at most a quarter of the gap. The rest is what Feyi Fawehinmi has called F.O.O.D — Favoured Operators Operating Domestically — an industrial-policy model that builds protected national champions and then lets them set the price.
## The Obasanjo turn (2002): a category error
The modern Nigerian cement story begins not with a manufacturer but with a trader. Obasanjo, troubled by Nigeria's $2 billion-a-year cement import bill, called in Aliko Dangote — at that point an importer, not a producer — and asked what would make domestic manufacturing attractive. Dangote answered, plainly, that imports were more profitable than manufacturing and that the government would have to tilt the playing field. The 2002 Backward Integration Policy did exactly that: cement imports were banned for any company without local production.
As Fawehinmi puts it in The King of F.O.O.D (Oct 2025), Obasanjo committed a category error. He sought a cement manufacturer and conflated this with a cement trader, "and so turned to Dangote." A trader's "singular preoccupation is with margins: he may possess scant understanding of how the product he handles is actually made, but excels at purchasing low and selling high." Twenty years later the country has acquired no mastery of cement technology — the kilns, the precalciners, the bag-filter systems are all bought from China — and Dangote "merely purchases the technology from China at low cost and sells it to Nigerians at a markup."
## Defensive capacity
By the companies' own published figures, Dangote runs 35.25 million tonnes per annum of installed capacity in Nigeria; BUA runs 17 mtpa; Lafarge runs 10.5 mtpa. Add CCNN and the smaller players and the country has roughly 63 mtpa of cement plant on the ground. Domestic consumption in 2025 was just over 28 million tonnes. The producers therefore run plants at about 45% utilisation by design — and keep adding capacity they have no intention of using. Fawehinmi calls this defensive capacity: excess plant exists to deter any new entrant, not to lower prices.
In the nine months to September 2025 Dangote Cement sold a virtually identical volume of cement in Nigeria as in the same period of 2024. Revenues rose by more than 42 percent. EBITDA surged by 85 percent. Manufacturing costs rose by 4 percent. There is only one explanation for selling the same product for far more money with almost no cost increase: pricing power. The Economist had already noted in 2014 that "Dangote's margins in Nigeria are 63%, compared with the 30–40% margins typical in other frontier markets."
## Cross-country pricing
The price evidence is brutal. A 50 kg bag of cement in 2024 retailed at ₦7,500–₦9,000 in Lagos and ₦11,000+ in the South-East and far North. The identical bag retailed at the equivalent of $5 in Lome, $4.50 in Accra, $4 in Douala — all imported from the same regional producers, all paying ocean freight that Lagos does not pay. Tinubu summoned the producers to the Villa in February 2024; the resulting "voluntary" price cap of ₦7,000 lasted six weeks before quietly disappearing.
## Why exports do not happen
Dangote Cement built plants across Africa — Tanzania, Ethiopia, Senegal, Cameroon, Congo, Zambia — but conducted virtually no cement exports out of Nigeria. The economic logic is direct: why sell a bag of cement cheaply overseas when you can command far higher prices at home behind the import ban? The same calculus is now being replayed with the Dangote Refinery and petrol. See The Reversal File · Act VII — Buhari's Border & FX Closures and Why Nigeria Has No Power.
## The 2026 tariff review
The April 2026 Fiscal Policy Measures, which trimmed protection across sugar, palm oil, and several other F.O.O.D sectors, left cement entirely alone. Bulk and clinker lines stayed at 50%; bagged cement remained on the import prohibition list where it has sat for two decades. Fawehinmi's note in Some F.O.O.D For Thought is dry: "Elections are coming. The big daddies were left alone. Are these two things related? I don't know, you tell me."
The rent extracted from Nigerian construction by structurally elevated cement prices is the single largest transfer in Nigerian industrial economics that nobody quite admits to. See also Companies that pay shareholders more than workers and The King of F.O.O.D.