The current state of inflation in the nation’s economy is a sad reality. It comes with a severe economic crisis that affects all facets of socioeconomic engagements in society. The situation demands an urgent declaration, with effective implementation strategy, of a state of emergency over the price of cement. Cement is an important building material used for activities and physical development in the real estate sector of Nigeria’s built/construction industry. The suggested declaration is aimed at restoring the widely needed public confidence for the production and provision of affordable housing, especially accessible modern town houses that are smart and energy efficient, for the low income earners in society, and the economy.
Energy inflation, in the most recent times, has significantly exacerbated the global macroeconomic market environment, with virtually all the economic sectors impacted. This inflation remains a major influence on other sectors in the nation’s commercial landscape. The gradual but sustained increases in the prices of most construction (building materials) goods and professional services have forced most home off-takers and consumers to drastically and substantially slow down their speed of acquiring liveable, modern smart shelters due to reduced purchasing power of all known and the unknown prospective home owners.
The identified global impact of energy costs, partly linked to the closure of the Strait of Hormuz, significantly influences inflationary pricing of most commodities; and this is directly responsible for the “cost push” inflationary price of cement. This key challenge requires that the government should particularly approach the economic problem, and domestically tackle it headlong and holistically! The reason for this is that such challenges are a function of political leadership. So the onus lies on the government to effectively fix it, by resetting the cost of cement in this economy (without undue advantage being taken for visible monopoly by anyone in the cement business). This strategic plan and project implementation, with execution arrangements by the government, can effectively reset costs of construction materials. This will be toward the ultimate actualisation of targeted favourable results that shall be beneficial to the entire citizenry. Without government intervention, the ills of inflation in the system will continue to eat up the future prospects of the players and investors in the entire construction industry. Besides, the entire economy will not get better because of the visibly existing dysfunctional structure.
Cement ought to be the cheapest construction raw material in the entire real estate development value chain. The uncontrollable rising cost of cement remains very worrisome. This calls for the government organ for consumer price protection, to urgently sit up and engage the players, actors and investors in the cement supply value chain, to examine every step in the chain that actually led to this present alarming and lamentable situation in the building industry. All stakeholders must be involved in this effort at discovery because the standardisation and quality of the product is also another perspective on the challenges being faced in cement production, usage and its consumption. This refers to the often recorded cases of collapsed buildings in the country. Sub-standardisation in this regard is a matter of very great concern. The quality of cement being produced and churned out of the cement manufacturing plants, coupled with the correct mixing formula by the end users for physical development should be seriously addressed in its strictest terms because of human lives that may be involved whenever such a catastrophe occurs.
An institutional organ like the Real Estate Developers Association of Nigeria (REDAN), an organised private sector body in the real estate sector, should be in a partnership with cement manufacturers, all relevant organs and governmental agencies to collaborate, and ensure that the nation’s economy receives the necessary growth boost from their various activities in the ecosystem. This, therefore, requires the government to help the players in the real estate business to enjoy a level playing field and be well positioned to produce affordable, liveable, modern smart houses. This is with a view to having them contribute to the positive growth and to the required macroeconomic productivity to fill the existing housing deficit in the economy.
Investors in the built industry are believed to be ever ready to embrace the good gestures of the government once lands are made available and allocated to them, to swing into action and produce climate compliant shelters that will serve as energy efficient edifices that are also built in accordance with prevailing ESG guidelines for the environment, stipulated land laws and the dedicated building rules and regulations. The cement manufacturers in the economy (the Dangotes, the BUAs and the Lafarges) should be public-interest sensitive when fixing cement prices in their sector, if the economy must survive and succeed.
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