Cement is one of the most essential materials for construction and real estate development in Nigeria. It is used for building houses, roads, bridges, dams, and other infrastructure projects.
However, in recent times, the price of cement has been increasing steadily, reaching an all-time high of N8,500 per 50kg bag in some parts of the country. This has raised concerns among stakeholders and consumers about the impact of the rising cost of cement on the construction and real estate sector in Nigeria.
The main factors that have contributed to the increase in the price of cement are the high demand for the product, the scarcity of foreign exchange, the insecurity and instability in some regions, the hike in transportation costs, and the inflationary pressures in the economy.
These factors have affected the production, distribution, and availability of cement in the market, leading to a supply-demand gap that has driven up the price.
The rising cost of cement has several implications for the construction and real estate sector in Nigeria. First, it increases the cost of building materials and reduces the profit margin for contractors and developers. This may discourage new investments and projects in the sector, as well as affect the quality and standard of construction.
Second, it affects the affordability and accessibility of housing for low- and middle-income earners, who constitute a large segment of the population. This may worsen the housing deficit in the country, which is estimated at over 20 million units.
Third, it may hamper the government’s efforts to provide infrastructure and social amenities for the citizens, especially in rural areas where cement is needed for roads, schools, hospitals, and other public facilities.
To mitigate the negative effects of the rising cost of cement on the construction and real estate sector in Nigeria, some possible solutions are:
The government should intervene to regulate the price of cement and ensure its availability and affordability for consumers. This may involve subsidizing the product, providing incentives for local production, facilitating access to foreign exchange, and enforcing anti-monopoly laws.
The stakeholders in the sector should explore alternative sources of building materials that are cheaper, more durable, and more environmentally friendly than cement. These may include clay bricks, bamboo, wood, metal, or recycled materials.
The consumers should adopt cost-effective and innovative ways of building and designing their houses and properties. These may include using less cement per unit area, opting for simpler and smaller structures, or incorporating energy-saving and waste-reducing features.