President of the Nigerian Institute of Quantity Surveyors (NIQS), Kene Nzekwe has thrown his support behind the federal government‘s threat to cement manufacturers to open the borders for cement importation in the country if they fail to reduce cement prices.
He said presently, cement manufacturers are holding the country to ransom with about a 100 percent to 150 percent increase in price within just six weeks.
Nzekwe advised the Minister of Housing and Urban Development, Arc Ahmed Dangiwa to not just threaten the manufacturers but work on opening the borders to importation if the manufacturers refuse to play ball.
The President said inflation is part of economic cycles but what Nigeria is currently facing is hyperinflation, which is an uncontrollable surge in general price levels.
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He made the statement yesterday in Abuja at a press conference organised by the Institute on addressing the impact of hyperinflation on the Nigerian construction industry: the urgent need for government intervention for stabilizing construction costs in Nigeria.
He said: “We support the Minister’s threat to cement manufacturers in the country about opening the border for importation and we hope it goes beyond threats and the government actually does it because the manufacturers are holding Nigeria to ransom.
“The price of cement, using a 50kg bag as an indicator, between January 2024 and February 2024 a period of about six weeks, has increased from N4,500 to between N12,000-N13,000. This is an increase of between 100% to 150%. Reinforcement steel rods, another major material for construction moved from around N590,000 -N650,000 per ton as of January 2024 to N1,200,000 -N1,400,000 as of February 2024 an increase of over 100% in a short run of less than six weeks.
“This ugly trend is making it more difficult for prospective clients to afford construction projects and has forced many projects to stall, pushing contractors into financial distress. The repercussions extend beyond stalled projects; it impedes the development of crucial infrastructure such as roads, hospitals, and educational facilities. Private sector investors are also reluctant, creating an adverse cycle that hampers economic growth and job losses in the construction Industry.”
He added: “On stabilizing the exchange rate, the government must employ a mix of monetary policies and exchange rate policies to stabilise the exchange rate, making our currency competitive globally. The clamp down on saboteur Bureau de Change (BDC) that are distorting our economy should be sustained and the system cleansed until all forex transactions are transparently done in a regulated manner not hawking currency on the streets as it is currently being done.”
Nzekwe added that the knee-jerk reaction of persuading manufacturers to bring down the prices or face dire consequences at this stage may be counter-productive.
He said: “Our recommendation will be for the government to sustain engagement with local construction material manufacturers to understand and address their challenges. Some of the challenges highlighted by the local manufacturers include exchange rate volatility which has seen our currency depreciate by about 300% in a few months thereby affecting the imported components of their manufacturing like spare parts, mining explosives and import tariff which is indexed in US Dollars.”
