Reduce Price Of Building Materials To Make Houses Affordable, Emefiele Tells Manufacturers

The Central Bank of Nigeria Governor, Mr Godwin Emefiele on Thursday called on manufacturers to reduce the high price of building materials in the country to make the construction of houses affordable for Nigerians

The Governor said this in an address delivered in Sokoto at the inauguration of new plant of BUA Cement Plc.

He said due to the fact that the housing sector plays an important role in creating jobs and reducing the level of poverty, it has become compelling for manufacturers of building materials particularly cement and steel to reduce their prices.

While admitting that these products are also being manufactured for exports with high possibility of generating more revenue for the manufacturers, the CBN Governor urged them to put the interest of the country first so that the price of these products could go down.

Cement prices have surged by 40 per cent one year after Nigeria’s largest cement manufacturers boasted of crashing cement prices in the country.

Dangote Cement and BUA Cement had locked horns in February 2021 following the increase in the price of cement.

During the period, cement prices were trading between N3,200 to N3,400. In 2020 the prices of cement went up to N4,000.

But BUA Groups Chairman, Abdulsamad Rabiu, said his company and other big industrial players were benefitting, but insisted that the country has no business with a cement price as high as N4,000.

Few days into 2022, cement prices are trading at N4,700 per bag and N4,500.
The development had triggered a surge in the overall cost of construction projects.

An Abuja based cement dealer who is known as Nnamdi had told THE WHISTLER that both Dangote and BUA cement are trading around N4,400 and N4,500.

“Both Dangote Cement and BUA Cement are now selling for N4,500,” the cement dealer said.

Further checks revealed that in the first week of 2022, the commodity rose as high as N4,700 causing panic among developers.

Emmanuel, a cement dealer based in Abuja attributed the rise in the price of cement to several challenges such as rising cost of materials, rising prices of gas, cost of distribution, increasing cost of servicing equipment like cement plants, electricity issues and other operational impediments.

He further revealed that it has become a common practice for the price of cement to surge during the dry season because of the huge demand for the product by construction workers.

The increase in cement price is coming at a time when the Federal Government is planning fresh investments of N3.53trn in the Nigerian housing sector to reduce the deficit in the country which is estimated at about 17 million houses.

The investments, to be made within the next four years is part of the strategies of government to boost housing delivery and guarantee affordable houses for Nigerians.

Nigeria has experienced rapid yet uncontrolled urbanisation, which put intense pressure on an already stretched housing infrastructure.

Nearly 50 percent of Nigerians currently reside in urban areas, which represents almost 100 million people.

Over the years, housing supply constraints and asymmetric information on existing housing policies have prevented Nigeria from keeping up with the rapid urbanisation rate.

Also, lack of policy continuity arising from political risk and change of government over the years have stifled government efforts thus, explaining the gap between the availability of affordable housing and the demand due to rising population.

Furthermore, the sector faces other hurdles such as proper land administration constraints; weak adherence to real estate market regulations; unhealthy speculation by stakeholders in the sector; low private sector involvement, poor housing database and mapping constraints as well as rising cost of building materials.

These challenges have all contributed to severely curtailing access to land despite the government’s best efforts to reform the mortgage sector.

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