Nigeria: Soaring Cost of Building Materials Threatens Federal Govt’s ‘Affordable’ Housing

The federal government’s desire to ensure affordable housing accommodation for Nigerians is under threat due to rising prices of cement and other building materials in the country despite government’s earlier assurances to Nigerians, LEADERSHIP can report.

The price of cement, among many other building materials, has been on a consistent rise in Nigeria, with no end in sight for a possible reduction.

In fact, there has been a major increase in the prices of building materials, and this has also affected the prices of housing units being produced by the government and developers.

For example, one bag of cement which sold for N3,400 a year ago now costs between N4,600 and N4,800; the same thing goes for iron rods. For instance, a 12mm rod was N1,800, but now it is N4,200.

A trip of 30-tonne granite was N180,000, now, it is N300,000; a trip of sand that was N12,000 is now N35,000, while a piece of block that was N140 is now N300.

Also, one pack of vitrified floor tiles which cost N2,700 per pack as of last year now costs N3000 per pack while a pack of Spanish/Italian tiles now costs N7,000 from initial N3,200. Also, prices of iron rods – 10mm, 12mm, and 16mm, which were selling at N344,000, N330,000 and N330,000 in February 2021 have jumped to N442,200, N446,450 and N442,200.

The prices of imported roofing sheets and ceiling tiles moved to N3,500 per square meter (psqm), while the price of plywood cost N10,000 per sheet last year but now it is N12,500, LEADERSHIP gathered that recently,

The minister of Industry, Trade and Investment, Niyi Adebayo, had urged the public not to embark on panic buying and storage of the product as the current market price was temporary.

He said that discussion between the government and cement manufacturers was being ramped up in order to meet the increased demand of the commodity.

Nigeria’s Inflation Rises To 15.63%

Nonetheless, the retail price of cement in Abuja and its environs is currently at over N5, 000.

The minister had blamed the hike in the price of cement on the reduction in production volumes in the second and third quarters of 2020 as a result of the COVID-19 pandemic, the EndSARS protests as well as downtimes in some manufacturing plants.

Adebayo said the development affected the volume of stockpiles in the supply chain due to the reduction of cash flow to major distributors as well as high cost of transportation.

He further observed that there had been massive build-up of demand from public works contractors as they strive to meet milestones and deadlines on projects across the country.

The minister assured the public that government would continue to be on the alert to its responsibility of ensuring goods and services are available at reasonable prices.

Speaking with LEADERSHIP, the project manager, Amore Homes, Mu’Azu Umar, said that it will be difficult to provide affordable houses for Nigerians in the sense that the cost of living, and not just the cost of building materials, is high. So all these put together are worrisome.”

Umar noted that there is an increase in the dollar rate starting from last year until now and that has affected almost every business in the country.

“Before you start a building project, you will consider the price of cement, sand, stone, blocks, iron and all that. So once there is an increase in the dollar rate, it affects all of these things, and once it affects them it will definitely affect the production.

“If you are building and the cost of building materials increases, you will want to increase the rent of the house, so that you can get something.

“So as a developer, after building a house, you put the house up for sale and you expect to get profit, not loss,” he said.

He called on government to come out with policies that would help to address these challenges, as according to him, it is the rise in the dollar rate that is causing the cost of building materials to rise, but if there is a policy that will address this, then there will be affordable houses for Nigerians.

A trader from Lugbe who gave his name simply as Mr Solomon said that a bag of cement now is N4,600, while a bundle of zinc is N28,000, adding that almost everything about building materials had increased in cost.

According to him, the cost of building materials constitute about 65 per cent of the total construction cost.

“Invariably, building materials form the main factors that restrict the supply of housing. Having said that, it has been observed that one main barrier to the realisation of effective housing in Nigeria, as revealed in successive government efforts, has been the cost of housing in the country,” he added.

Managing director of Goddy Ebere Global Limited, Sir Godson Osuji, decried the escalating prices of building materials like iron rods, binding wires, nails, corrugated zinc and paints.

He also said that the prices of cement and sand had hit the rooftop, making building construction now a high-spending venture.

He said, “Our company is having challenges in buying building materials at the current prices of N3,700 and N4,000 depending on the producers of the cement.”

Mr Kunle Adeniyi, a dealer in iron rods and other building materials, blamed the ugly trend on the manufacturers who had decided to create artificial scarcity.

“The manufacturers decided to create artificial scarcity so that they could make more money. They have an association and they told them to stop production for certain numbers of days, in order to create more demand than supply. That is the strategy they are using to create scarcity in the market so that when people are looking for available products, they can buy at any price when demand is more than the supply”.

Adeniyi noted that governments that are concerned about its people would not allow foreigners to come in and dictate prices and take advantage of the people and let them get away with it.