***Implication of astronomical hike on construction activities, as stakeholders speak
Cement is a major component in construction works, and accounts for between 40 and 45 per cent to deliver a building project.
But the unexpected hike in the price of cement in November 2020 by about 50 per cent, which caught Nigerians napping, has remained a major headache to players in the Nigeria’s building construction industry who are already grappling with several other challenges.
Before the sudden hike in cement price in November 2020 to N3,500 per 50kg bag, the same 50kg bag was sold for N2,600. Subsequently, this astronomical rise in cement price has resulted in a hike in the price of sandcrete blocks, rings, concrete and mortar products in which cement is a major input in their production.
For instance, when a bag of cement was N2,600, 9-inch sancrete block was sold for N180 while 6-inch sandcrete block was sold for N160. But with the present price of a bag of cement, 9-inch sandcrete block now sells between N200 and N220 while 6-inch sandcrete block sells between N180 and N190. Reacting to the development, the Director-General of Federation Of Construction Industry FOCI, Mrs Olubunmi Adekoje, an engineer, said “The escalating cost of cement poses a major threat to construction in Nigeria as it could result in fluctuations in construction cost, reduce volume of construction output, increase risk of project abandonment and result in a downward effect on the national gross domestic product, GDP.
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She, therefore, appealed for stability in the price of cement so as to reduce the negative effects on construction in Nigeria. In his reaction, the national president of the Nigerian Institute of Building NIOB, Kunle Awobodu, condemned the astronomical rise in the price of cement in Nigeria, pointing out that the low purchasing power of Nigerians will promote temptation for quality compromise in construction activities.
Awobodu, therefore, called on the government to step in quickly and save the nation from imminent danger of substandard building construction, pointing out that Nigeria is a country that is blessed with population, intellect and resources, stressing that the population can be a strength or a liability depending on how resources are managed. According to Awobodu, for investors and manufacturers, the population presents a large market for their products, while for citizens, the population presents a raison d’etre for the crash in prices because of the law of large numbers.
He said the recent increase in the price of a 50-kilogram bag of cement from around N2,600 to N3,500 and beyond, portends a bad omen for the construction industry and the nation at large, insisting that whatever the underlying reasons given for the hike in price, the NIOB is actuated by altruism to bring the attendant or unintended consequences to the limelight so that stakeholders can appreciate and respond to the emergency that the nation is confronted with.
Source: Vanguard
