Housing crisis looms as building material costs soar

In his report, TOPE SUNDAY examines the rising cost of building materials in Nigeria and seeks a way out.

The building and construction industry is at the moment witnessing one of its worst moments, as exchange rates, building materials, and labour prices have forced the increase in construction costs to 200 per cent

Blueprint Weekend can report that the exchange rate crisis has worsened and affected the building sector negatively, and the effect is being felt more on imported materials like windows, doors, ceramics, tiles, plumbing appliances, and sanitary wares, which represent 23 per cent of materials in the building market.

But while the exchange rate is taking its toll on majorly the imported building materials, the prices of the local materials, which account for 37 per cent of materials in the market, have also been affected by the increase in the cost of production and transportation to the end-users.

In particular, the price of cement has moved from a paltry sum of below N4000 last December to N13,000.

The outcry

 As the cost of building materials are rising the Managing Director, Leisure Court Estate Limited, Builder Segun Abolaji, has cried out that affordable housing may not be possible soon if cement prices and land allocation remain unrealistic.

Abolaji, who spoke in Abuja recently, pleaded with the federal government to subsidise the housing sector and building materials.

He said the rising cost of building materials has made it difficult to have affordable housing in Nigeria.

“Another factor why affordable houses cannot be realistic is because of the cost of cement and building materials. Only gypsum is sourced outside the country. Yet the cost of building materials is skyrocketing,” Abolaji stated.

Also speaking at a meeting between the federal government and Cement Manufacturers, the Minister of Housing and Urban Development, Architect Ahmed Musa Dangiwa, said the unfortunate situation poses a threat to housing delivery which is the main focus of the ministry, and a priority of President Bola Tinubu-led administration.

“For example, if we were planning to build a one-bedroom apartment for about N8 million, it will now cost twice that much, about N16 million to build. If a Nigerian could afford to own a home of N8 million, it would now be impossible to do so. We are also aware of several persons who have had to suspend construction work because of this development,” he said.

He added that the ministry is alarmed by the current situation, especially considering the projects the ministry has embarked on to provide affordable and social housing delivery to low- and medium-income earners and vulnerable members of society.

“We have already awarded contracts for Renewed Hope Cities and Estates in 15 states of the Federation. There is also the PULAKU Initiative through which we intend to build at least 1,000 houses in seven states affected by banditry.

“We are worried that the unreasonable rising cost of cement and other building materials in the country will affect these plans,” he said.

FG’s move

In a bid to stem the rising price of building materials, particularly cement, the Federal Government and cement manufacturers have agreed to reduce the price of the product to between N7,000 and N8,000 per 50kg depending on the location nationwide.

This was part of the resolution at the stakeholders’ meeting conveyed by the Minister of Works, Senator David Umahi, which had the Minister of Industry, Trade, and Investment, Doris Uzoka-Anite, in attendance in Abuja.

Also, the representatives of Dangote Cement; BUA Cement, and Lafarge Cement companies were in attendance at the meeting which lasted for almost four houses.

Reading the communiqué, Umahi said the cement manufacturers had committed to review the price when they receive the expected remedies from the government.

To this end, he disclosed that the prices of cement products had been pegged to between N7,000 and N8,000 per bag depending on the location.

The minister said certain issues including smuggling, bad roads, high energy costs, and the forex crisis caused the high price but stressed that manufacturers had expressed their readiness to bring down the prices in the future.

He said: “The cement manufacturers have noted to the government that the present high cost of cement in the market is very much abnormal in some locations nationwide. Ideally, they noted that cement price, and retail price to a consumer should not cost more than between N7,000 to N8,000 per 50 kg bag of cement.

“Therefore, the government and the cement manufacturers, which are Dangote Plc, BUA Plc, and Lafarge Plc have agreed to have their cement price nationwide between N7,000 to N8,000 naira per 50 kg pack of cement, depending on the locations, which means that this price depends on the locations.

“Going forward, the government has advised manufacturers to set up a price monitoring mechanism to ensure compliance with the prices that are set today.”

Order 5, an antidote?

Nigerian architects under the auspices of the Nigerian Institute of Architects, Wednesday, asked President Tinubu to implement Executive Order 5 to tackle the rising cost of building materials in the country.

The President of the Institute, Architect Mobolaji Adeniyi, noted that there was an urgent need for an Executive Order to arrest situations while discouraging unnecessary imports.

He said: “We encourage all government agencies to curb its excessive appetite for foreign goods and services. We specifically request that the “Presidential Executive Order for Planning and Execution of Projects, Promotion of Nigerian Content in Contracts, and Science, Engineering, and Technology, Executive Order 5, which was signed into law on February 2, 2018, be dutifully implemented.

“As a matter of urgency, we should prioritize the use of local materials in project design and delivery. As professionals, we owe our country the onerous duty of providing solutions to seemingly daunting technical challenges.

“This should be our primary calling as professionals in this era of economic gloom. The challenges may seem very daunting but not insurmountable.”

Foreigner can’t build Nigeria – NIA scribe

Speaking with Blueprint Weekend, the Secretary General of the Institute, Architect Chike Ibeanu, said to move out of the current crisis of rising cost of building materials, he said implementation of Executive Order 5 is the way to go, arguing that no foreigner can help develop Nigeria as a country.

Ibeanu, who also attributed the high cost of cement products to the hike in transportation fares, said Order 5 should be implemented to salvage the country from the self-inflicted crisis.

He said: “Nigeria is a large country. We found out recently that one of the major reasons the price of materials is going up is because the cost of transportation is becoming very high. If you speak with the manufacturers, they tell you that the factory prices are maybe between N3,500 and N4,000.

“When you add the cost of transportation like for example the transport far what you normally do for N300,000 per trip from Obajana, is now almost a million, if not more when you split that across some 900 bucks or 600 bucks you bought, it is expensive. 

“Secondly, you see Executive Order 5 is very, very important for the future of our industry and our nation. Because no foreign entity, no foreigner is going to build Nigeria for us, no matter how well-intentioned they are.

“As citizens and as professionals in this industry, it’s very important that the government enforces that. It’s the deliberate policy of the government that is well thought out. It’s well-intentioned for the country, but we need to enforce it.”