Housing Crisis: Experts Urge Nigeria to Curb Imports, Use Local Materials

Experts push local building materials

Experts in Nigeria’s construction and housing sectors have called for a reduction in dependence on imported building materials, arguing that greater use of locally available resources could help lower construction costs and improve housing affordability.

/ You Might Also Like /

The call comes amid sustained increases in the prices of cement, steel, roofing materials, timber and other construction inputs, which have raised the cost of developing new homes and contributed to the growing affordability gap in the housing market. Recent industry reporting has linked the sharp rise in material costs to import dependence, foreign-exchange pressures, energy costs, logistics and expensive financing.

Import Dependence Raises Construction Costs

Building materials account for a substantial share of total construction expenditure, making the sector particularly vulnerable to movements in the naira and the cost of imported inputs.

Prof. Bolaji Wahab, former chairman of the Nigeria Institute of Building and a lecturer at Obafemi Awolowo University, said building materials can account for between 65 and 75 per cent of a building project's cost.

He argued that the heavy reliance on imported materials and imported production inputs exposes manufacturers and developers to foreign-exchange fluctuations.

Even materials produced locally can become more expensive when manufacturers depend on imported machinery, components, energy or raw materials.

The result is that exchange-rate pressures can move through the entire construction value chain, from manufacturers to distributors, contractors and ultimately homebuyers.

Local Production Could Reduce Housing Costs

The experts' argument is not simply for an outright ban on imported building materials. Rather, it centres on developing sufficient domestic manufacturing capacity to make locally produced alternatives competitive in price and quality.

Nigeria has significant raw-material resources that can support the production of several construction inputs. However, weaknesses in energy supply, financing, transportation, technology and industrial capacity continue to limit the ability of manufacturers to produce at scale.

The Sun's recent reporting on the building-materials crisis similarly identified local production as an important part of the solution, with stakeholders calling for greater investment in domestic manufacturing and research.

High Material Costs Are Affecting Housing Supply

The impact is already being felt across the housing market.

Building engineers and other industry participants have reported that rising material prices are forcing some developers to scale down projects, while individual homeowners are delaying or abandoning construction.

This creates a direct supply problem. When fewer homes are completed, the available housing stock fails to keep pace with population growth and household formation.

The pressure can then feed into the rental market as tenants compete for a limited supply of completed properties.

Recent industry reporting cited sharp increases in the prices of cement, blocks, reinforcement bars, roofing sheets and timber compared with their prices several years ago.

Financing Is Another Major Constraint

Reducing import dependence alone will not solve Nigeria's construction-cost problem.

Manufacturers also need access to affordable long-term finance to expand production capacity, acquire machinery and invest in research and development.

Wahab noted that manufacturers face lending rates of more than 20 per cent, making it difficult for businesses to secure affordable capital for expansion.

This is particularly important for housing because the cost of financing affects both sides of the market.

Manufacturers pass financing costs into the prices of materials, while developers also factor borrowing costs into project budgets. Higher development costs ultimately affect the selling price or rent required to make projects financially viable.

Energy and Transport Costs Remain Critical

Local production will only become genuinely competitive if manufacturers can produce and distribute goods at reasonable cost.

Energy is therefore a major part of the equation.

Manufacturers that rely heavily on diesel and other alternative sources of power face significantly higher operating expenses. Transport costs also increase the price of materials before they reach construction sites, particularly when poor roads and long-distance haulage are involved.

The Sun reported that stakeholders have identified energy, transport, taxation, logistics and financing as interconnected factors behind the persistent increase in building-material prices.

Government Support Could Accelerate Local Manufacturing

Experts have called for policies that encourage domestic production rather than simply responding to rising prices after they occur.

Measures proposed include cheaper credit for manufacturers, tax incentives, reduced taxes on building materials, improved roads, reliable electricity, stronger technical education and faster land administration.

Research and development could also play a greater role.

Nigeria's universities, polytechnics and research institutions already have expertise that could be directed towards developing cheaper, locally appropriate construction materials and technologies.

Supporting commercialisation of such research could create new manufacturing businesses while reducing the construction industry's dependence on imported products.

Housing and Industrial Property Could Benefit

A successful local-manufacturing strategy would have implications beyond residential construction.

New factories producing cement-related products, steel, roofing materials, tiles, sanitary fittings, electrical components and other building products would generate demand for industrial land, warehouses, logistics facilities and worker accommodation.

Clusters of building-material manufacturers could also support the emergence of specialised industrial corridors around major cities.

For property investors, this creates a potential link between housing affordability and industrial real estate: a stronger domestic manufacturing base could simultaneously reduce construction costs and create new demand for industrial property.

Local Materials Must Meet Quality Standards

However, increasing local production should not mean compromising on building quality.

Substituting imported materials with locally produced alternatives will only benefit the housing market if those products meet appropriate technical and safety standards.

Quality control, certification and professional oversight are particularly important in Nigeria, where building failures have repeatedly raised concerns about construction practices.

Experts have therefore also called for stronger skills development and certification of artisans as part of efforts to improve the quality and safety of construction.

Outlook

Nigeria's housing crisis cannot be addressed through increased housing construction alone if the cost of building remains beyond the reach of households and developers.

Reducing excessive dependence on imported materials, strengthening domestic manufacturing, improving energy and transport infrastructure and providing affordable industrial finance could help lower some of the structural costs embedded in housing development.

The objective should not simply be to replace imports. It should be to build a competitive domestic construction-material industry capable of producing quality products at scale.

For Nigeria's housing market, that would improve the economics of new development, support industrial investment and create a stronger foundation for expanding the supply of affordable homes.

READ MORE