POLITICAL ECONOMY OF BACKWARD INTEGRATION IN THE NIGERIAN CEMENT INDUSTRY, 1999-2012

Abstract

This study explored the impact of backward integration policy and deregulation on manufacturing and importation of cement in Nigeria between 1999 and 2012. We interrogated the following research questions: Did the backward integration policy increase the output of cement in Nigeria between 1999 and 2012? Did the deregulation of cement manufacturing industries increase the contribution of the sub-sector to Nigeria’s economic development between 1999 and 2012? Did the restriction of license to import cement in Nigeria lead to the empowerment of the local cement producers between 1999 and 2012? Did importation of cement account for the rising cost of the product in Nigeria between 1999 and 2012? The study was anchored on some basic propositions emanating from the Marxian political economy theory. Data for this study was collected through the triangulation of qualitative methods of data collection which includes primary and secondary data from written descriptions, face-to-face elite interview with a total of thirteen interviewees and indirect observation of the cement market dominance and price fluctuations at different intervals. The study found that; the backward integration policy on cement increased the output of cement tin Nigeria: the deregulation of cement manufacturing industries did not increase the contribution of the sub-sector to Nigeria’s economic development; the restriction of license to import cement in Nigeria has led to the empowerment of the local cement producers; and importation of cement did not account for the rising cost of cement in Nigeria. we recommended among others for the review of the backward integration policy and its import licensing system in order to accommodate the interests of both manufacturers and importers in the industry; government should establish Cement Competition Commission to describe trends of competition and punish offenders who brew falsehood about product output and scarcity in the industry and finally, government should set up a ‘Modernization Fund’ to revamp cement technology and thereby equip the sector to create more jobs and increase standard of living