The Nigerian Institute of Building (NIOB) has said that the recent increases of electricity tariff and Premium Motor Spirit, popularly known as petrol, will have negative impacts on the nation’s housing sector and consequently make more Nigerians homeless.
In a statement at the weekend, NIOB, which was reacting to recent upward review of prices of the products, said the price adjustment, was coming at a wrong time, when millions of Nigerians were finding it difficult to solve their housing issues.
Kunle Awobodu, NIOB president, who signed the statement, said though the Federal Government through its agencies might have adduced reasons for these increases such as appropriate pricing based on market forces, the effects of the new price regime were enormous.
Due to the global corona virus pandemic and cost of production cost, NIOB said that, some building materials manufacturers were already closing shops.
It added that, increasing energy costs would further choke the few that are still surviving.
“Bringing to fore, the NIOB past market survey, a 50kg bag of cement rose from N1,600 to N2,000 and steel reinforcement bars (locally manufactured TMT) from N135,000 to N140,000 due to hike in fuel prices from N65 to N120 per Litre in 2012. The increase in fuel price from N120 to N145 in 2016 resulted in the rise of cement price to N2,300 per 50kg bag and steel bars to N180,000 per tonne.
“Just before this current upward review of fuel price to about N151.56, a 50kg bag of cement sold for N2,600 while steel bars was N230,000 per tonne. Sadly, these two prominent building materials are being manufactured locally, thereby questioning the rationale behind backward integration and local content policies.
“From the NIOB archive, hikes in fuel prices always led to price increases in building materials. Hence, it does not require a Nostradamus to predict inflation in the prices of building materials with the latest increase in fuel price.”
On the implication on Nigerians, NIOB said, the new order would hurt workers’ purchasing power of housing commodity, as many, who have been saving to relocate to their own houses will still have to tolerate their landlords for a long time to come.
The group also noted that increasing electricity and petroleum costs would further drive up production, distribution and transportation costs. It added: “The disposable incomes and purchasing power of Nigerians are further reduced. Without appreciable construction activities, employment challenges remain hydra-headed.”
NIOB is therefore urging a reversal the old prices.
“It is our considered view that reversing the recent increases will do the critical masses and Nigeria’s economy and, especially the construction industry good. Increased construction activities will benefit both the government and the citizens.”
