Follow Us on Google
By Maduka Nweke
Nigeria’s housing crisis may not be solved by building more houses alone. For property developers and housing experts, the more fundamental challenge is the rising cost of the materials required to put those houses on the ground.
From cement and iron rods to roofing sheets, tiles, blocks and other finishing materials, the cost of construction has continued to rise, putting home ownership beyond the reach of millions of Nigerians and forcing developers to either increase house prices, postpone projects or resort to cheaper materials.
Stakeholders in the built environment believe that one of the most effective ways to reverse the trend is for Nigeria to develop a strong local building materials manufacturing industry.
They argue that producing more building materials locally would reduce the country’s dependence on imports, ease pressure on foreign exchange, create jobs, strengthen the naira and, most importantly, make housing more affordable.
They also believe that if the cost of key materials, particularly cement, could be brought down substantially, many Nigerians who currently consider home ownership impossible would begin to build gradually according to their income.
Deepen local resources usage
A property developer, Mr. Obiora Okeke, said Nigeria had reached a point where the country was effectively exporting its raw materials only to import finished products at much higher prices.
He likened the situation to selling a forest to foreigners, allowing them to harvest the trees, process them abroad and eventually sell the finished products back to Nigerians at exorbitant prices.
“If the politicians who launder our money abroad could attract these manufacturers into the country, they will not only help in stabilising the naira, they will also help in employing the youths who usually travel abroad for greener pastures,” he said.
Okeke argued that many of Nigeria’s economic problems could be addressed if the country developed its manufacturing capacity rather than remaining heavily dependent on imported goods.
“The situations we suffer in Nigeria are not things we cannot surmount. But because the politicians want to perpetually keep the Nigerian populace poor, they keep the money where it will not be useful to the greater public.
“It baffles me that at this stage Nigeria is still remaining a dumping place for second-hand materials from other countries,” he lamented.
He appealed to the Federal Government to urgently tackle the rising cost of building materials, arguing that doing so would have a direct impact on the housing crisis.
For the stakeholders, the building materials market is at the heart of the housing sector because every increase in the price of construction materials eventually finds its way into the price of houses and rents.
Chief Paul Okoye, another property developer in Amuwo-Odofin, Lagos, said building materials could account for between 30 and 50 per cent of the total cost of a construction project and could influence as much as 80 per cent of the project schedule.
He noted that the common materials used on construction sites include blocks, tiles, roofing sheets and iron rods, among others.
According to him, the fact that many of these materials are produced, distributed and sold largely by private operators leaves the market vulnerable to changes in supply and demand.
“In Nigeria, private individuals control the building material market, which makes it prone to market forces of supply and demand and dealings of private players, especially middlemen,” Okoye said.
He argued that the peculiar nature of housing made it necessary for the government to pay closer attention to the building materials market.
Shelter, he noted, is one of the basic needs of human beings, alongside food and clothing, and should therefore not be treated entirely like an ordinary commodity whose price is determined only by market forces.
Spiralling prices of building materials
The consequences of allowing building material prices to rise unchecked are far-reaching.
According to Okoye, high material costs contribute to project delays and abandonment, encourage the construction of substandard houses and ultimately push up rents.
He attributed the rapid increase in building material prices to several factors, including government fiscal policies, scarcity and hoarding of raw materials, fluctuations in fuel prices, unreliable power supply, inadequate infrastructure, high interest rates and corruption.
Another major problem, he said, is the country’s dependence on imported construction materials and inputs.
“Though cement is produced locally, we import most of our conventional building materials,” he said.
He added that the final price of materials is also affected by the brand, quality and location where they are purchased, noting that proximity to the source or market can make a significant difference.
The situation has created a difficult environment for both developers and prospective homeowners.
For individuals, rising construction costs mean that wages and savings often lose value before enough money can be accumulated to complete a building project.
For developers, the problem is even more complicated because construction projects are usually planned months or years ahead. A developer may prepare a budget based on the price of cement, steel and other materials at the beginning of a project, only to discover that the prices have jumped sharply before the project is completed.
This uncertainty makes it difficult to determine the final price of houses.
Okoye said the situation could result in developers constantly reviewing their financial projections and increasing sales prices to reflect prevailing market conditions.
Such adjustments, however, can create tension between developers and prospective buyers.
Some off-takers may accuse developers of changing the terms of agreements or “shifting the goal post” after they have committed their money.
The pressure can also push some developers towards cutting corners by using inferior materials in an attempt to keep projects within budget.
Stakeholders therefore believe that government intervention is necessary, not only to protect consumers but also to create an environment where developers can plan with greater certainty.
They argue that incentives should be provided to local manufacturers to increase production and meet domestic demand.
Tax incentives, access to cheaper financing, improved electricity supply, better roads and transport infrastructure, and easier access to foreign exchange for essential machinery and production inputs could encourage more investors to establish factories for building materials.
A stronger local manufacturing industry would also have benefits beyond housing.
It could create thousands of direct and indirect jobs, reduce the amount of foreign exchange spent on imports and provide a ready market for locally sourced raw materials.
It would also support small businesses involved in construction, transportation, distribution and fabrication.
Dr. Doherty Oyelese, a property developer, said the persistent increase in the cost of conventional building materials had forced players in the sector and researchers to explore cheaper and more sustainable alternatives.
Other News
He noted that some progress had already been made, citing polished bamboo for floor finishing as one possible cheaper alternative to conventional vitrified or ceramic tiles.
The search for alternatives, he said, is important because the housing sector cannot continue to depend exclusively on materials whose prices are exposed to foreign exchange volatility and international market pressures.
Waste reduction
Waste reduction is another area where developers can reduce construction costs.
Oyelese said property developers could adopt better project management techniques and construction equipment to minimise wastage of materials on building sites.
For instance, poor planning can lead to excessive use of cement, sand, blocks, steel and other materials. Better measurement, procurement and supervision can reduce such losses.
But while developers can improve efficiency, stakeholders insist that the bigger challenge requires government action.
Okeke and other industry players want the Federal Government to develop policies that would make local production of building materials commercially attractive.
The objective, they said, should not necessarily be to fix prices artificially, but to increase production, improve competition and eliminate unnecessary costs along the supply chain.
A situation where more manufacturers are producing cement, roofing materials, steel, tiles, doors, windows and other construction inputs locally would make it harder for a few suppliers or middlemen to dictate prices.
The issue of cement is particularly important because it is one of the most widely used materials in Nigeria’s construction industry.
The Chairman of the Board of Directors of BUA Cement Plc, Abdul Samad Rabiu, had previously linked the high price of cement to the impact of foreign exchange volatility on production costs.
Speaking at a press briefing after the company’s Annual General Meeting, Rabiu said Nigerians had raised concerns about the price of cement but argued that manufacturers were also facing significant increases in their costs.
“At N10,000 per bag, I do not think the price is high, considering the exchange rate moved from N300 to over N1,000 to the dollar. Even when it was N300, cement was N4,000 to N5,000. So if you look at it, this is not exploitation,” he said.
He explained that some of the company’s expansion projects were initiated when the exchange rate was around N400 or N500 to the dollar, but that the naira subsequently weakened significantly before the projects were completed.
That, he said, affected capital expenditure, imported raw materials and energy costs.
“Before, we had to go to the central bank to get forex, but that has now changed. Now all the banks have foreign exchange, and the dollar rate is the same. Whatever rate I get today is what you get. Before, it was not like that,” Rabiu said.
He expressed optimism that a stronger naira would eventually translate into lower cement prices.
“So, the prices you are seeing now are real prices, not anticipation prices. Things are getting better. At one point, the dollar hit N2,000 to $1, but now it’s around N1,200. And I’m optimistic that it will get to N1,000 or even lower. When that happens, cement prices will come down too,” he said.
The BUA chairman also disclosed that the company was completing a major expansion project involving a new three-million-tonne production line, which was expected to raise its total production capacity to about 20 million tonnes annually by the first quarter of 2027.
For housing stakeholders, developments such as increased cement production are important, but they are only part of the solution.
They believe Nigeria needs a broader strategy covering the entire building materials value chain.
From mining and processing raw materials to manufacturing, transportation and distribution, every stage must become more efficient if construction costs are to fall significantly.
Nigeria is blessed with many raw materials that can support local production of construction materials. The challenge is turning these resources into affordable products through investment, technology and industrial capacity.
Stakeholders also believe that research institutions should work more closely with manufacturers and developers to develop building materials suited to Nigeria’s climate and income levels.
The country does not necessarily have to rely entirely on expensive imported designs or materials when locally available alternatives can be developed, tested and commercialised.
The housing deficit has remained a major challenge, particularly for low- and middle-income Nigerians. Government housing programmes have attempted to address the problem, including the social housing initiative established under the Muhammadu Buhari administration through Family Homes Funds Limited, which targeted the delivery of 200,000 affordable houses while supporting private developers.
But the stakeholders contend that such programmes will struggle to achieve their objectives if the cost of construction continues to rise.
A government may provide land and financing for housing, but if the price of cement, steel, roofing materials, tiles, doors and other essentials keeps rising, the number of houses that can be delivered with available funds will continue to shrink.
This is why the manufacturing of local building materials is increasingly being seen as an important part of the solution to Nigeria’s housing crisis.
Lower production costs would make it possible for developers to offer houses at more affordable prices. More Nigerians could also adopt gradual construction, buying materials and developing their houses in phases as their income permits.
As Okeke noted, if the price of basic construction materials falls significantly, many Nigerians would find ways to build their own homes rather than remain permanent tenants.
The benefits would extend beyond home ownership.
More construction activity would create jobs for artisans, engineers, architects, surveyors, transporters, manufacturers and other professionals. It would stimulate demand for locally produced goods and services and generate additional economic activity.
Ultimately, stakeholders argue that Nigeria cannot build affordable houses on an unaffordable production system.
The country must therefore move beyond merely talking about housing deficits and focus on the cost structure behind every building.
A deliberate policy to support local production of building materials, improve infrastructure, expand energy supply, provide affordable financing and encourage innovation could bring down construction costs and unlock investment in mass housing.
For developers, the message is clear: efficiency and better planning are necessary.
For manufacturers, increased local production is critical.
For researchers, innovation and cheaper alternatives must remain priorities.
But for the government, the bigger responsibility is to create the environment in which all these efforts can succeed.
Until the cost of the materials used to build houses becomes affordable, Nigeria’s dream of mass home ownership will remain difficult to achieve.
Local building materials, therefore, may not be the entire answer to the housing crisis, but stakeholders believe they could be one of the most important pieces of the puzzle.
