Nigerian cement industry expected to maintain strong growth
in fiscal year 2026 The Nigerian cement industry is expected to continue its strong performance in fiscal year 2026. This optimistic outlook is mainly due to the government's continued increase in infrastructure spending, the policy shift to concrete road construction, and the high price level maintained in the past two years, which together have consolidated the profit margins of operators. Analysts believe that although private sector demand remains weak, these forces will support the fundamentals of the industry to remain solid.
Government infrastructure projects have become the core driving force
, and CardinalStone, a research Institute in Lagos, points out that government-driven infrastructure construction is the biggest catalyst for cement consumption in 2026. The federal government has earmarked 7.5 trillion naira for infrastructure in the 2025 budget, a significant increase from 4.5 trillion naira in 2024, demonstrating its determination to bridge the infrastructure gap. In addition, the government has secured a $747 million loan from Deutsche Bank for the first phase of the Lagos-Calabar Coastal Highway, underlining its determination to accelerate large-scale projects. Major projects such as the Lagos-Calabar Coastal Road and the Sokoto-Badagri Superhighway are expected to provide important anchors for cement demand in 2026.
Policy Shift to Concrete Roads Brings Structural Benefits
The policy shift to concrete roads is seen as another important driver after years of failures with asphalt on flood-affected corridors. According to CardinalStone's analysis, the concrete road policy is a structural victory for the cement industry, which can boost demand in a way that asphalt projects can't. In addition to roads, the housing sector is becoming a major demand center. In the face of Nigeria's estimated housing deficit of up to 28 million units, the government is pursuing large-scale housing schemes and innovative financing schemes led by the public-private partnership model, which are creating a stable, cross-annual demand pipeline for cement producers. Weak
private demand coexists
with regional export opportunities. However, demand from the private sector remains subdued. High inflation, weak purchasing power and expensive mortgages have slowed construction activity, particularly in cities such as Lagos and Port Harcourt, where many developers have postponed or scaled back projects. But analysts expect private construction activity to begin to recover once inflation cools and the currency stabilizes further. At the same time, Nigeria's role as a regional cement hub is growing. Producers, notably Dangote Cement, have continued to export clinker and cement to West and Central Africa within the framework of the African Continental Free Trade Area. Ongoing corridor upgrades and port development, including the Bakassi deep-water port, are expected to reduce logistics costs and widen export routes. The
profitability of the industry has increased significantly, and the sustained price tailwind of future price growth or slowdown
has helped cement companies cope with cost pressures. Average revenue per tonne rose 34.7% year-on-year to N161,459 in the first nine months of 2025 after surging 56.4% in fiscal 2024. Retail prices in the districts are maintained at between 8,500 and 10,000 naira per 50 kg bag. Looking at the nine-month financial statements of the three major companies, Dangote Cement, BUA Cement and Lafarge Africa, their combined profit after tax rose sharply to N1.2 trillion from N386 billion in the same period last year, mainly attributable to price increases within each operating region. Operators have also lifted margins on the back of cooling inflation and stabilisation in the naira through the adoption of alternative fuels, optimised logistics and deleveraging efforts.
With inflation falling for seven straight months, analysts at CardinalStone expect price gains to slow significantly in 2026, and perhaps even retreat, as producers prioritize market share before new capacity comes on line in the coming years.
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