Nigeria's federal government has approved a number of new incentives to boost local cement production.
Business Day reports that the ministry of finance on Tuesday announced the following measures:
All forms of restrictions on the importation of gypsum, an important raw material for cement production, has been removed.
A 5% import duty ceiling has been placed on the importation of gypsum until sufficient local production is achieved.
The issuance of cement import licences will be dependent on the guarantee that such licences will be fully utilised within a specific period of time.
To stimulate local mining activities for cement production, the time it takes to obtain exploratory and mining
licences from the relevant government agencies has been reduced to 18 and six months respectively.
A N500 (US$3) per tonne levy on cement imports has been imposed to encourage local production.
To further develop local production capacity, a cement institute will be established. The facility will be funded through the N500 per tonne special levy on cement imports.
Tariff incentives for imported spare parts and machinery for cement production has been reinstated.
Government has granted a two to three year duty-free period for the importation of machinery, equipment and spare parts to cover the initial stages of setting-up cement production businesses.
Mansur Muktar, minister of finance said in a statement that "it is our hope the 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".
In 2008, the Nigerian cement industry had an estimated market size of N361 billion (US$2.4 billion), or in aggregate consumption terms, 13.4 million tonnes, of which 46% (6.2 million tonnes) was produced in Nigeria. The Federal Ministry of Commerce and Industry estimates that effective demand was around 18 million tonnes.
