Every man in his right senses dreams of owning a house, but going by the instability seen in all areas of the nation, dreams of lower construction costs by intending homeowners might have been cut short, following the increase in cement price products by manufacturers.
The development has already caused a ripple effect in the open market, before the hike, a bag of cement costs about N1, 600 but just in a few days, the price has gone up by about 44 per cent.
Investigations showed that operators under the Cement Manufacturers Association of Nigeria (CMAN) have increased prices of brands by N600 per bag in factories, including additional N100 cost for haulage. This has increased retail prices from N1,600 to N2,300 depending on location. In some areas, cement price have shot up to N2,350 or higher.
Reacting to the development, 2nd Vice President, Nigeria Institute of Building (NIOB), Mr. Kunle Awobodu said the increase may have been as a result of cost of production and the devaluation of the naira.
He lamented that with the hike, the cost of construction will increase while the need for cost variation in all ongoing contracts and abandonment of projects may become inevitable, adding that it may also discourage people from embarking on new projects.
“This is going to create crisis in the construction sector and clients contractors and quantity surveyors may have disagreements due to price variations. New price on old contracts in a competitive bidding may eventually lead to sub-standardisation in construction.
“Invariably, it will lead to upward reviews of contract sums. New and on-going projects will be delayed until there is agreement on the contract variations. It can also expedite construction activities because of the anticipation of further increase.”
Expressing surprise over the unexpected hike in the price of cement, a distributor of the product in Arepo, Ogun State, said it many have been occasioned by the current economic down-turn. Mr. Kunle Salami, another distributor at Ajah area of Lagos, said he has stopped his requests for more supplies as he is not sure of his customers reactions.
He decried the increase and urged the government to intervene either in terms of policy for the manufacturing sector or the provision of constant electricity in order for them to thrive.