From Importer to Exporter: How One Policy Transformed Nigeria’s Cement Industry

In 2002, President Olusegun Obasanjo enacted a policy that would transform Nigeria’s cement sector. The policy was straightforward: any company wishing to import cement into Nigeria was required to establish a local cement manufacturing facility first. This audacious initiative aimed to decrease the nation’s dependence on imported cement while enhancing domestic production. Aliko Dangote, recognized as Africa’s wealthiest individual, was one of the business leaders who embraced this challenge. Previously an importer, Dangote made substantial investments in local cement manufacturing, establishing plants and increasing production capacity. Other firms, such as Lafarge, Unicem, and the Cement Company of Northern Nigeria, followed his lead, resulting in a booming industry.

The effects of the policy were profound. Prior to its introduction, Nigeria’s cement output was minimal. However, with the new regulations in effect, production began to surge. By 2006 and 2007, Dangote had established local facilities, while Lafarge expanded its operations. Currently, Nigeria produces over 60 million metric tons of cement each year, a significant increase from the 1.9 million tons produced before the policy was enacted. The cement sector has evolved into a vital component of the economy, generating employment and fostering economic development.¹ ²

A New Chapter of Self-Sufficiency

The policy has yielded positive results, with Nigeria now generating over 60 million metric tons of cement annually. The nation has emerged as the largest cement exporter in Africa, reportedly earning around $500 million each year from cement exports alone. Dangote attributed the industry’s achievements to the policy, stating that it transformed the landscape and allowed Nigeria to attain self-sufficiency in cement production. The expansion of the industry has also spurred heightened competition, with several key players competing for market dominance. Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc are among the leading entities in the sector.

The cement sector in Nigeria is anticipated to maintain its growth trajectory, with an estimated annual growth rate of 3.2%, reaching $3.42 billion by 2024. This growth will be fueled by the rising demand for cement within the construction industry, especially in the residential and infrastructure areas. Given the increasing population and swift urbanization, the demand for cement in Nigeria is projected to remain robust.

Challenges and Opportunities

In spite of the cement industry’s achievements, Dangote pointed out two significant challenges hindering industrialization in Africa: the lack of electricity and the inconsistency of government policies. He called on governments to make decisive moves akin to those of Obasanjo to foster industrial growth and establish a conducive business climate. Furthermore, Dangote stressed the necessity of local processing of natural resources to generate employment and economic value. With Nigeria’s expanding success in exporting refined products and fertilizers, Dangote envisions a promising future for the nation’s industrial landscape.³

The policies enacted by President Obasanjo have profoundly influenced Nigeria’s cement industry, transforming the nation from a major importer to a notable exporter. The industry’s success serves as a benchmark for other sectors, underscoring the significance of courageous policy choices and private sector investment in propelling economic growth and development.