Meristem: Nigerian cement makers yet to take full advantage of AfCFTA

Nigerian cement makers are yet to fully exploit the export opportunities presented by the African Continental Free Trade Area (AfCFTA), according to a recent report by Meristem. The report also highlights concerns about the recent ex-factory price hikes by major cement manufacturers in Nigeria, which could further strain consumer purchasing power in the country. In a recent interview on CNBC Africa, Seun Arambada, Senior Analyst at Meristem, discussed the challenges and opportunities facing Nigerian cement makers in light of the AfCFTA and the reopened Nigerian land borders. Arambada mentioned that there is significant potential for Nigerian cement manufacturers to expand their market reach beyond the borders of Nigeria and tap into the export opportunities provided by the AfCFTA. However, he noted that there seems to be a lack of proactive efforts from the cement industry to take full advantage of these opportunities. One of the key themes of the interview was the need for Nigerian cement makers to adapt their strategies and operations to align with the requirements of the AfCFTA. Arambada highlighted the importance of understanding the trade dynamics and regulations under the AfCFTA to ensure a smooth transition to exporting cement to other African countries. Three key points emerged from the discussion: 1. **Export Potential:** The AfCFTA provides Nigerian cement makers with an opportunity to significantly increase their market share by exporting to other African countries. However, there is a need for strategic planning and investment in logistics and distribution networks to make this a reality. 2. **Consumer Purchasing Power:** The recent ex-factory price hikes by major cement manufacturers in Nigeria raise concerns about the impact on consumer purchasing power. With inflation already putting pressure on household budgets, further price increases could have negative implications for the construction industry and infrastructure development. 3. **Operational Adaptation:** Nigerian cement makers need to adapt their operations to meet the requirements of the AfCFTA and ensure compliance with trade regulations. This may involve upgrading infrastructure, optimizing production processes, and enhancing supply chain efficiency. In the interview, Arambada emphasized the importance of proactive engagement and strategic planning to navigate the challenges and leverage the opportunities presented by the AfCFTA. He underscored the need for the Nigerian cement industry to prioritize market expansion and export growth to drive sustainable development and economic growth. As Nigerian cement makers continue to grapple with the complexities of the global trade landscape, the spotlight remains on their ability to innovate, adapt, and capitalize on the export opportunities available under the AfCFTA.