Nigeria’s Heavy Dependence on Imported Building Materials Threatens Housing Market Stability

Nigeria’s housing market faces mounting structural risk as its reliance on imported building materials reaches 70%, according to the newly released State of Lagos Housing Market Report (Volume 3). The report warns that the dependence on foreign inputs leaves the sector vulnerable to global supply disruptions, foreign-exchange volatility, and escalating construction costs, with Lagos Nigeria’s economic centre carrying the deepest exposure.

Nigeria’s Building Materials Market Under Severe Strain

The report, published by the Roland Igbinoba Real Foundation for Housing and Urban Development, highlights a persistent mismatch between Nigeria’s abundant natural resources and its limited capacity to process them into usable construction inputs. Despite the availability of limestone, clay, timber, and other materials, the country continues to import the bulk of its steel, tiles, fittings, roofing products, and finishing materials.

The analysis underscores that market instability has become structurally entrenched. Currency depreciation, logistics bottlenecks, and inadequate domestic manufacturing leave the entire construction value chain prone to sudden price distortions and supply constraints.

Structural Reforms Needed to Reduce Dependence

According to the report, Nigeria’s efforts to improve affordability and deepen housing supply require a coordinated industrial strategy. Recommended reforms include:

• Establishment of specialised manufacturing clusters for building materials.

• Incentives for local production and backward integration.

• Streamlined and transparent supply chains to minimise cost escalation.

• Consistent regulatory and fiscal policies that support long-term investments.

• Adoption of sustainable and innovative construction practices, including alternative materials.

• Targeted flows of domestic and foreign capital into the industrial sub-sector.

The report argues that without these interventions, price instability will persist, and the country’s housing deficit which experts estimate in the tens of millions will continue to widen.

Lagos as a Barometer for National Housing Pressures

Lagos, the country’s largest construction market, provides an early indication of national trends due to its scale and concentration of real estate activity. The report notes that demand continues to rise sharply, driven by rapid population growth, urbanisation, and heavy migration into the state.

Government-led infrastructure projects, including the Lagos Rail Mass Transit and several ongoing road expansions, have further stimulated activity in the construction sector, pushing up demand for building materials. But rising input costs remain a formidable obstacle.

The construction industry nationwide is projected to grow by 8% annually and reach ₦25.72 trillion by 2025. Between 2020 and 2024, the sector recorded a compound annual growth rate of 12.1%, with projections suggesting continued expansion at 6.4% between 2025 and 2029, reaching ₦35.38 trillion by 2029. However, the report cautions that much of this expansion reflects rising prices, not increased output.

Runaway Material Costs Drive Sector Inflation

The report provides a detailed review of how material costs have escalated between 2015 and 2025, with the sharpest inflation occurring from 2023 onward. Reinforcement steel, one of the most essential inputs in construction, illustrates the scale of volatility.

In 2015, a 12mm locally produced reinforcement bar cost under ₦100,000 per standard unit bundle. By 2023, the same category of steel reached approximately ₦800,000 per tonne. Between May 2023 and May 2024 alone, prices more than doubled. In 2024, the cost surpassed ₦1.6 million per tonne, and the upward trend persisted into 2025.

The report attributes the extreme escalation to exchange-rate fluctuations, import dependence, shipping disruptions, and persistent inflation. Aluminium products, tiles, roofing materials, and electrical fittings were equally affected.

Macroeconomic Pressures Mask True Sector Performance

The report emphasises that while the construction sector shows strong monetary growth, this expansion reflects inflationary pressure rather than real increases in housing delivery. The rising value of the sector, therefore, conceals deeper structural weaknesses:

• Limited domestic manufacturing capacity

• Heavy exposure to the global supply chain

• High financing costs

• Lengthy approval processes

• Inefficient logistics and distribution networks

These factors collectively keep the cost of development elevated and restrict housing supply across income groups.

Because Lagos operates as the country’s principal construction hub, the report argues that reforms implemented in Lagos could serve as a blueprint for a broader national reset. Market dynamics in Lagos, both positive and negative, are typically replicated nationwide.

A Decade of Unchecked Escalation

Data provided in the report illustrates the long-term impact of inflation on building material prices:

• Imported 8mm reinforcement bars rose from roughly ₦102,000 per unit bundle in 2015 to nearly ₦6,500 per rod in 2024.

• Aluminium products and roofing components recorded price increases of over 100% from 2023 to 2024.

• Tiles, sanitary fittings, and electrical accessories followed similar upward trajectories.

The report concludes that the market is now heavily skewed, with affordability declining despite rising construction activity.

Conclusion: Need for a National Reset

The State of Lagos Housing Market Report (Volume 3) argues that Nigeria’s building materials market has reached an inflection point. While demand indicators remain strong and the construction sector continues to expand in nominal terms, the market’s structural weaknesses pose a threat to affordability, supply and long-term sector stability.

Reducing import dependence, deepening local production, and strengthening policy coordination are critical steps toward restoring balance. As the nation’s leading construction market, Lagos holds the potential to shape a national model for industrial reform one capable of stabilising costs, improving housing delivery and supporting sustainable economic development.