• Saturday, May 25, 2024
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BusinessDay

Homelessness, job losses loom as cement price nears N15,000/bag

Investors cautious about cement stocks despite H1’22 returns

Amidst efforts to close Nigeria’s housing gap and also lift a good number of citizens out of poverty, cement price in the country is rising with just a step away from N15,000 per 50kg bag.

This price increase means there will be affordability issues with far-reaching implications for housing supply and construction activities, both of which are solutions to two major social problems of home-ownership and job creation.

Nigeria has an estimated 20 million housing units deficit which is the reason homeownership level in the country is as low as 25 percent of its large-size population estimated at 200 million.

Construction industry is touted as the largest employer of labour. With the skyrocketing price of cement, many construction sites that are cement-based may be closed down or suffer setback in which case some workers–skilled and unskilled, will be thrown back into the labour market.

With the speed at which the price is rising, from N5,600 in January this year to N8,000 in Lagos,N8,500 in Enugu, N9000 in Onitsha, Anambra State, and N9,500 in Owerri, Imo State, the price is projected to rise to N15,000 in the days and weeks ahead. S nam

“I can talk about this; I’m probably one of the last people in Nigeria to get cement at below N9,000. About now, I should be taking delivery of 900 bags bought yesterday (Wednesday) at 8,200 and that is staff price, a builder, who did not want his name mentioned, alerted BusinessDay.

According to the builder, that same day, BUA Cement was selling for 10,000 while Dangote was 9,600. He could not confirm Lafarge, but advised anyone who had a building project to go ahead and buy as many bags of cement and building materials as he could afford.

“If you can, borrow and buy, it will be worth it, the builder advised further, stressing that the price of the product would hit N13,000 per bag in places like Enugu in a few days’ time.

Meanwhile, a 50 kilogramme bag of cement now sells for between N10,000 and N15,000 in the Federal Capital Territory (FCT), Abuja.

A Friday afternoon media report cites a market survey which says that in Gwarimpa, Area 10, Kubwa, Lugbe and Dawaki areas that of the FCT, a 50kg bag of Dangote cement sold for N10,000 while BUA cement stood at N15,000.

The report quotes a retailer in Gwarimpa who introduced himself as Yinka Adebayo as confirming that the price of Dangote cement is N10,000 while that of BUA is N15,000, recalling that he sold a bag of cement for N6,000 just last month.

“We sell Dangote cement at N10,000 per bag, and BUA is N15,000. Unfortunately, it will surprise you that I sold the same bag of cement for between N5,500 to N6000, last month,” he said.

In Kubwa, another retailer called Rukiyat Abdullahi said Dangote cement sold for N10,200 while BUA sold for N16,000. At Lugbe, the retailers confirmed that Dangote and BUA cement prices were N10,000 and N15,000, respectively.

Nigerians have been expressing worry over this development with Ahmed Dangiwa, minister of housing and urban development, decrying the astronomical rise in the price of the product and other building materials across the country.

He said the price hike was unacceptable, insisting however that the fluctuation in the exchange rate of the dollar could not be blamed.

But analysts have been pointing fingers at high transportation cost, general rise in , commodity prices and, most importantly, galloping inflation for the meteoric rise in the price of the product which is a major component of the building and construction materials.

The National Bureau of Statistics (NBS), in its Consumer Price Index report for January, said inflation soared to 29.90 per cent and that, of course, is the elephant in China shop.