Rising Cost of Cement in Nigeria to Affect Construction and Real Estate Sectors

In recent years, Nigeria has found itself entangled in a perplexing predicament – the exorbitant cost of cement. This indispensable construction material, vital for infrastructure development and housing, remains disproportionately expensive within the nation, creating a stark contrast to its more affordable availability in other African countries.

The rising cost of cement in Nigeria has several implications for the construction and real estate sectors. It increases the cost of building and reduces the affordability of housing, which is already a major challenge in the country.

The cost of cement in Nigeria has risen by over 60% in the last year, with a bag of cement now costing around ₦4,000 ($10) compared to ₦2,500 ($6) a year ago. This increase is due to several factors, including the high cost of production, transportation, and distribution, as well as the devaluation of the naira against the dollar.

The construction and real estate sectors are the most affected by the rising cost of cement. The cost of building materials, including cement, accounts for a significant portion of the total cost of construction. The increase in the cost of cement will, therefore, lead to an increase in the cost of building, making it more difficult for developers to build affordable housing.

This will also affect the real estate sector, as the high cost of building will lead to an increase in the cost of housing, reducing affordability for potential buyers2.To address this issue, the Nigerian government has taken several steps, including the approval of new cement plants and the reduction of import duties on cement. However, more needs to be done to address the underlying issues affecting the cost of cement in Nigeria.

Source: Tekedia, How the rise cost of Cement will affect Construction and Real Estate Sector in Nigeria