Price of Materials Skyrocket Amid Inflation
The increasing cost of cement, an important component for building construction has sent apprehension that prospective property developers may compromise quality in their projects.
Experts in the built environment fear that the dream of lower construction costs might have failed, as the development has already triggered a ripple effect in popular markets, with prices going up by about 20 per cent.
The hike in products is not divorced from the nation’s annual inflation rate, which climbed to 13.71 percent in September of 2020 from 13.22 percent in the previous month.
According to the National Bureau of Statistics (NBS), the rise was the highest inflation rate since February of 2018, leading to widespread increases in prices due to border closures and the pandemic crisis coupled with, lower interest rates.
Investigations by The Guardian has shown that the prices of major building construction components like cements, roofing materials, earth works, doors and iron rods have skyrocketed as seen in other commodities.
For instance, the price of Alu-zinc rose from N18, 000 the previous month to N19, 500.
Similarly, the price of a 50 kilogramme of cement rose to N3, 500, N3, 200, N3,000, from N2, 700 and N2, 650 previous months, while the price of Iron rod, is now between N280, 000 – N290, 000 per tonne.
Also, the prices of door is now N11, 000 from N9, 000, while roofing sheet price for Jumbo is N19, 500 and N27, 000 for Cameroon aluminum.
The price of granite went up to N190.000 per ton while, the price of sharp sand goes for N80, 000 and the price of nail goes N10, 000 per bag.
Confirming the development, a cement dealer in Lagos, Mr. Sunday Ilesanmi, said the price of a 50 kilogramme per bag is now going for N3, 600. He said the price has persisted for a month.
The product, he said, was sold at the rate of N2,700 and N2, 800 early October, before it increased to N3, 000 and N3, 600 this month.
According to him, there was scarcity of the product in the open market, which fuelled the rush by buyers.
He said, “With the high cost, the dealers don’t even see the product to buy from the manufacturers. We don’t understand the situation. What we learnt is that there was an increase by one of the manufacturers. I think that caused the problem in the markets.”
Ilesanmi revealed that the markets, usually experience an increase in price of cement towards end of the year.
But, described the current hike as too exorbitant, stating that it would affect the housing delivery process as contractors and developers will need to review their quotations.
Another dealer in Alagbole, Mercy Opaleke, who said there was no justification for the latest development from the manufacturers, stated that the product had become scarce in the markets.
But, the Executive Secretary, Cement Manufacturing Association (CMAN), Mr. James Salako, said no manufacturer had increased price of cement.
Buttressing that, a major distributor in cement and other building materials in Mowe area of Ogun state, Mr. Fadeyibi Emmanuel, blamed opportunists and logistics for the new prices, saying the manufacturers never did.
He stressed that because it is a free market economy, you cannot fix the prices or asked them to sell at a particular price.
According to him, the turn around time for transportation has increased from three hours to eight hours forcing some distributors to increase to recover loss.
While stressing that bad roads put pressure on distribution, Emmanuel said the covid-19 pandemic impacts on businesses is still there. The port congestion affected importation of raw materials, thereby reducing outputs, which the middlemen increase their prices.
He said, distributors in Ibadan, and other parts of the country have already increased prices two months ago.
He stated that many dealers hoard products and capitalised on that to maximise profit.
Emmanuel, however, said the increase might not be different with the economic realities in the country, which has affected all commodities.
According to him, the cost of living has gone up, including food prices and building materials.
Meanwhile, a senior official from one of the cement manufacturers called for restrained, saying things will soon fall back in place as country undergoes recovery processes.
The official, who did not want to be named said some cement sellers, did not understand these realities affected low output in some of the factories as only distributors with capacity with 20 to 30 trucks per day, will give accurate information, especially as it affects turn around time.
According to him, during the End SARS protests, many of the distributors refused to move their trucks for fears of attacks, which made the products to be left in the trucks, while they were waiting for right time to move.
The turn around time per trip jumped to nearly 40 per cent because the travel time increased twice due to bad roads, adding that the distributors lost hours are now added to the cost.
He further explained that the curfew affected the dealers, who always moved at night. “The consequence is that the products could not be transported coupled with the presence of some security men at the major roads, who normally collect money from truck drivers.”
A major distributor at Ibafo, said the middle men, often complained that they could not get products for two weeks and then hike the prices, without understanding that the manufacturers have not increased the price.
He stressed that The End SARs protests was also a big factor, as it triggered port congestion and delay in clearing imported materials.
According to him, the COVID- 19 pandemic forced manufacturers to reduce output to almost half due to delay in getting raw materials from abroad.
“Cement dealers also using increase in petrol price as an excuse to increase product price, even when petroleum are not used in manufacturing process,” he said.