One of the major causes of concern for many Nigerians willing to own a home is affordability. This affordability is affected largely by the cost of building materials – both for developers and individual builders.
Building materials contribute immensely to the cost and quality of housing, from what is used for the foundation to the materials for roofing and finishes. The building materials industry is an important contributor to the national economy of any country as its output governs both the rate and quality of construction work.
Over the past 10 years, there has been a dramatic increase in the costs of building materials in Nigeria, and this development threatens the performance of the construction Industry.
According to experts in the industry, the general direction at which prices of building materials are increasing in Nigeria was as the result of the combined effects of high interest rates, devaluation of the Naira, inflation, exchange rate of the Naira, cost of fuel and power supply, changes in government policies and legislations and non-effective distribution network of the materials.
The contribution of this to the increasing housing gap in Nigeria cannot be overemphasised. Many low to medium income earners have nearly given up the hope of ever owning a home of their own because of the unbearable cost of building materials.
Increase in the prices of building materials has multiplier effects on the industry. The rising cost of building materials has high implications on construction cost, volume of construction output, and risk of project abandonment.
The implication of the fluctuation in the cost of construction is such that projects are not delivered within the budget and time, the level of quality required is difficult to achieve, conflicts between contractors and clients ensue as a result of an upward review of contract sum and most likely leads to cases of abandonment where investments are tied-down since such projects will not be put to use at the time expected.
Another implication of the rising cost of building materials is such that the volume of construction outputs is reduced. The reduction in construction output is likely to jeopardize the government housing policy and invariably leads to shortage in the supply of housing demand of the citizenry and reduction in the employment, especially of labor workers in the construction sector, which by extension, is capable of bringing down the contributions of the construction industry to the nation’s gross domestic product (GDP).
If the government is committed to delivering mass affordable housing for Nigerians, she must be concerned about the rise in cost of building materials and do something about it.
Some stakeholders have suggested that government should formulate policy that will play down the agitations on the use of imported building materials by encouraging research in the production of local building materials.
Government should also take drastic steps to reduce the cost of production and transportation of goods by ensuring an adequate supply from the power sector and production of petroleum products through the local refineries as against dependency on importation.
General infrastructures like roads, bridges, power etc. that will boost local production should be provided or improved. There should also be an enabling environment which comprises of economic policies and the building of more factories through public private partnerships. This will lead to more made in Nigeria building materials, and reduce the general cost.
There is also an argument about the monopoly in the production of cement. The government should enable an equal playing ground to enable the kind of competition that can drive down the cost of building materials.
More so, government should encourage and support the development of alternatives to cement. For building sustainability in the 21st century, there are several alternatives to cement which have been successfully implemented in several places. These alternatives are not only dependable but cheaper.
Import duty wavers should also be introduced for those who import certain resources that are not locally available to enable the local production of building materials.
If the cost of building materials are reduced, it will definitely help increase the production of affordable houses for more Nigerians in need of houses.