*** Implications of the astronomical campaign on construction activities, according to stakeholders
Written by Kingsley Adegboye
Cement is a major component in construction work and accounts for between 40 and 45 percent for a construction project delivery.
But the unexpected increase in cement prices in November 2020 by about 50 percent, which caught Nigerians napping, remained a major headache for players in the Nigerian construction industry who are already facing several other challenges.
Before the sharp increase in the price of cement in November 2020 to N3,500 per 50 kg bag, the same 50 kg bag was sold for N2,600.
Subsequently, this astronomical rise in the price of cement has resulted in a rise in the prices of concrete blocks, rings, concrete and mortar products in which cement is the main input in their production.
For example, when the cement bag was N2,600, a 9-inch concrete block sold for the N180, while a 6-inch concrete block sold for the N160. But with the current price of a bag of cement, the 9-inch concrete block now sells between the N200 and N220, while the 6-inch concrete block sells between the N180 and N190.
Reacting to the development, Director General of the Federation of Construction Industry FOCI, Ms. Olubunmi Adekoje, engineer, said: “Increasing cement prices pose a major threat to construction in Nigeria, as it could result in fluctuating construction costs, reduce construction output, increase project abandonment risk and result in a reduced effect on the national gross domestic product, GDP.
It therefore appealed for cement price stability to reduce the negative effects on construction in Nigeria.
In his reaction, the national president of the Nigerian Institute for Construction NIOB, Kunle Awobodu, condemned the astronomical rise in cement prices in Nigeria, noting that the low purchasing power of Nigerians will promote the temptation to compromise in the quality of construction activities.
Therefore, Awobodu called on the government to quickly step in and save the nation from the imminent danger of poor building construction, noting that Nigeria is a country blessed with population, intellect and resources, noting that population can be a force or an obligation depending on how resources are managed.
According to Awobodu, for investors and producers, the population represents a large market for their products, while for citizens, the population is the reason for falling prices due to the law of large numbers.
He said the recent rise in the price of a 50-kilogram cement bag from about 2,600 to N3,500 and above heralds a bad sign for the construction industry and the country as a whole, insisting that regardless of the underlying reasons for the price hike, the NIOB is driven by altruism to bring accompanying or unwanted consequences into the spotlight so that stakeholders can appreciate and respond to emergencies facing the nation.
“Even at previous prices before hiking, Nigerians have faced the challenge of owning their homes and developing other infrastructure.
“There are a lot of reports of ‘cutting corners’ due to endangered material inputs. Concrete blocks for concrete, concrete and mortar are products in which cement is part of the input raw materials for their production.
“These products also play a major role in the cost and strength of structures built with them.
“Almost all entrances to the cement production material are available locally. All cement plants existed in Nigeria before closure.
“We acknowledge that maintenance and repairs may be needed, it is our opinion that this, however, is not a sufficient justification for an astronomical increase in cement prices,” Awobodu said.
The developer, who preferred to remain anonymous, complained that likely price changes for most construction projects could cause confusion and work against their clients as a result of the increase in cement prices.
“He added that resistance to requests to adjust construction costs could force recourse to unprofessional construction practices with consequences for the integrity of construction projects.
Vanguard News Nigeria