Importation of bagged cement banned

The President approved the decision, in line with the National Industrial Policy.

A statement issued by the Ministry of Finance in Abuja yesterday said: “The recommendation of the committee approved by the President include: systematic and controlled programming of cement imports subject to the appropriate tariffs, reinstating of policy of banning importation of bagged cement in line with National Industrial Policy; and restricting issuance of cement import licences to only manufacturers and other players with track records of commitment to backward integration, including bulk cement importers with suitable bagging facilities.”

The policy, which was aimed at boosting local cement manufacturing, and bringing down cement prices, said the Minister of Finance, Dr. Mansur Muhtar, followed the recommendations contained in the report of the committee raised by the President to review the cement industry in Nigeria under the chairmanship of the minister.

A bag of cement costs N1,600.

But the statement, which the minister’s Special Assistant on Communications, Ms Deborah Okafor, signed, said the government would also, henceforth, connect the granting of import licences to guarantee that they are utilised within a specified period of time. The statement said any abuses in the utilisation of the licences would attract appropriate sanctions.

Besides, it said, President Umaru YarÁdua approved 2013 as deadline for the completion of backward integration in the cement industry. Measurable and strict monitoring process would be instituted, it said.

“As part of measures to encourage backward integration, the President has approved 2013 as deadline for the completion of backward integration in the cement industry, while definite and measurable milestones together with strict monitoring mechanism will be put in place. To fast track the process, the duration for obtaining explanatory licenses and mining licenses from relevant government agencies has been shortened to 18 months and six months respectively,” it said.

The statement noted that other cost-reducing measures for cement manufacturers had been approved for implementation. These, according to the minister, include concessional pricing and special allocation of LPFO, de-linking the price of gas for cement production from the price of LPFO and granting of duty free importation of LPFO during acute domestic shortage of cement.

The government approved classifying cement companies in the same manner as fertiliser companies with regard to gas pricing, examining the key cost drivers in cement production, together with cement manufacturers, with a view to articulating a sustainable price for cement in the domestic market.

The government also granted cement manufacturers other incentives to encourage local production. These include reinstating tariff incentives for imported spare parts and machinery items, two to three years duty-free period of importation for machinery, equipment and spare parts to cover the plant building phase and the first two years of commencement of production.

Government also approved tax deductible incentives on investments in system conversion to coal firing, removal of all forms of restrictions on the importation of gypsum, reduction of a maximum of 5% import duty on gypsum until its local production on a commercial basis is achieved.

The government, said Muhtar, will also intensify efforts to streamline ports procedures, and ensure the achievement of the 48-hour maximum period for clearance of cargoes from the ports.

The statement reads in part: “Mr. President has also approved the introduction of a special levy, in the sum total of N500.00 per tonne, on all cement imports to assist in the development of local capacity through the establishment of a Cement Training Institute (CTI) in Nigeria.”

Muhtar was quoted as saying: “It is our hope that cement manufacturers will reciprocate the good gesture of Mr. President by dedicating themselves to not just meeting domestic demand for cement but achieving the target of making Nigeria a cement exporting nation by 2013. The government will soon constitute an inter-ministerial implementation committee that will ensure full integration of Mr. President’s directives”.