The handshake deal between the Nigerian government and cement manufacturers to cap cement prices between N7,000 and N8,000 per bag has sent shockwaves through the built industry, with developers fuming and demanding a steeper price cut. The agreement, hailed as a compromise by the government, is being met with fierce criticism, raising concerns about the future of affordable housing and the wider economic impact.
Broken Promises and Unanswered Questions:
The industry’s ire stems from several unresolved issues. Dr. Aliyu Wamakko, President of the Real Estate Developers Association of Nigeria (REDAN), points to BUA Cement’s earlier promise of slashing prices to N3,500 by January 2024, calling the current reduction “not good for the economy.” This sentiment is echoed by Toye Eniola of the Association of Housing Corporations in Nigeria, who questions the fairness of the N7,000-N8,000 range when compared to BUA’s initial pledge.
Cementing Inequality? Developers Fear a Deeper Deficit:
Beyond broken promises, stakeholders fear the new price points remain too high, jeopardizing their ability to deliver affordable housing and potentially widening the existing 28 million housing deficit. With most cement components sourced locally, Wamakko argues an N8,000 price tag is “unbeneficial” and risks leaving numerous building projects unfinished, further exacerbating the housing crisis.
Beyond Cement: A Call for Local Alternatives:
Recognizing the limitations of the price agreement, industry experts are urging a broader shift towards embracing local building materials. Eniola advocates for utilizing interlocking blocks, which require minimal cement, and exploring alternatives like bamboo for iron rods. Jide Odusolu of Octo5 Holdings stresses the need to move from bagged cement to producing concrete locally, promoting efficiency and cost-effectiveness.
Unveiling the True Cost: Gas, Transparency, and Accountability:
While acknowledging the potential impact of gas costs on production, stakeholders remain wary. Odusolu calls for government intervention to establish fair, domestic gas pricing mechanisms, citing the absurdity of a gas-flaring nation struggling with high production costs. Additionally, calls for greater transparency and accountability from both cement manufacturers and the government regarding pricing decisions and local resource utilization are gaining traction.
The Road Ahead: Renegotiation, Local Solutions, and a Watchful Eye:
As the industry grapples with the fallout of the price agreement, demands for renegotiation are loud and clear. Developers urge a revised agreement that reflects the potential for local sourcing and addresses gas pricing concerns. Embracing local building materials and ensuring transparency, alongside holding stakeholders accountable, are seen as crucial steps towards long-term stability and affordability in the built industry.
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