… but builders say tech, innovation to help beat high costs
The rising cost of building materials in Nigeria seems to be threatening the Federal Government’s drive to bridge a housing deficit in the country, which has been estimated at 17 million homes.
This has made many working, middle-class people in the country, both in the public and private sectors, who are counting on government supported mortgages for home ownership to keep wondering whether government contractors will call for renegotiation and upward review of housing contracts previously signed with them.
One concerned civil servant at the Federal Secretariat I Abuja, who spoke with BusinessDay anonymously, feared that low-income earners like her may be mandated to pay higher to own homes if housing contracts supported by the Federal Mortgage Bank of Nigeria happen to undergo upward review.
But rather than seek revaluation of their contract sums at the back of rising input costs, government contractors say they would rather deploy technology and innovation to be able to deliver and also make gains.
In a telephone conversation with BusinessDay, Ayo Bello, who is the director of business development at Citec International Estates Limited, one of the estate development firms with contract engagements with the Federal Government, says his company does not have plans to call for upward review of previous contracts signed with the government or any other business entity.
According to Bello, “we will certainly go with market trends in our housing development business but at the end of the day, our building process, through the deployment of modern technology, will give us 10 percent less as compared to conventional building models that are common in Nigeria.”
Citec has its sites and building material component manufacturing facilities in the Gwarimpa area of Abuja, the
Nigerian capital.
At the moment in Nigeria, where housing development principally depends on brick and mortar, 20 tonnes of gravel chippings had gone up from N65, 000 to N75, 000 in January 2017, while stone dust also remains high at the current rate of N55, 000 for 20 tonnes.
Cement used to be sold at N2, 300 in the last quarter of 2016 but is now selling at between N2, 650 and N2, 700.
Apart from cement, gravel chippings and cement, the price of iron rod which, about 24 months ago, was N70,000 per ton, went up to N150,000 per ton in January 2017. Presently, a ton of iron rod sells for about N250, 000.
BusinessDay findings also show a 41 percent increase in the price of Aluminum roofing sheets from N1,550 to N2,200 per length, as well as that of Dulux paint, which was selling for N22,000 per ‘bucket’ but has gone up 22 percent to N27,000.
This has slowed down the off-taker market in the Nigerian housing sector, arousing fears that homes will even get more
expensive.
However, in a telephone interview with BusinessDay, Hakeem Bello, who is special adviser on communications to Babatunde Fashola, the minister of power, works and housing said “the minister just finished a tour of construction sites in the north east, but none of the contractors expressed concern over the rising cost of construction inputs with respect to their ongoing projects.”
In late 2016, Babatunde Fashola, the minister of power, works and housing, stressed the importance of cost and delivery time of houses, saying that Citec, among other partners, was given government prototype housing designs to ascertain how fast and at what cost they could build and sell the houses.
This, the minister said, was to enable the government to buy those houses on behalf of the Nigerian people who have been enlisted under its various mortgage plans.
Fashola noted that Citec, one of the building component production partners, promised to bring their cost down by 10 per cent, a reduction he described as significant for residential housing.
The Citec housing technological innovation could help Nigeria beat its rising cost of housing inputs and also improve market turnover for other technology savvy estate firms.
