Friday, April 1, 2011

AFRICA: NIGERIA: Rising prices of cement and building collapses



For many years, incidents of building collapse have been wreaking havoc on hapless Nigerians. Many people have been sent to their untimely graves, others, though survived such catastrophes, are maimed for life just as property worth billions of naira have been lost.

The cause of many of the buildings that collapse has been attributed to use of inferior materials, poor concrete mixes and use of quacks in supervision and construction proper. Another cause of building collapse in the country is the high cost of cement.

Experts have advocated a reduction in the prices of cement against the current hike in the price of a bag from N1450 to N2100 to tackle the ugly occurrence. They argued that such increment would only pace way for more collapses in future since many intending owners of houses may be tempted to miximise cost of construction by employing quacks to supervise their constructions. 

They called for a definitive policy on building materials as a priority. Such a policy, they stipulated should analyse the risk factor to all practitioners in the sector. 

Professional consultants in the building sector such as architects, engineers, builders, quantity and land surveyors, town and urban planners are all going to be negatively affected by this unwarranted increase. The army of local artisans will also be affected as a reduction in labour requirements on projects is likely, as a cost reduction measure.

For instance, president of The Nigerian Institute of Architects (NIA) Arc Olatunji Bolu, described the hike as “unexplainable” saying “cement is an essential building material that cannot be compromised or effectively substituted in today’s local conventional construction climate”.

“The obvious effects are higher construction costs across board, which will have to be paid for somehow. The attempt by firms to maintain a profitability ratio that will be additionally battered by other equally unstable factors is likely to translate to cost-cutting measures. This will undoubtedly result in poorer quality, unsafe structures that have less real value. Woe betide the prospective tenant who patronises a developer caught up in the economic crunch artificially initiated by the price hike, but who cannot simply adjust the scale of the property under construction to suit the new situation. Building more with less material is a recipe for disaster.”

He expressed that “We believe that there is a fundamental gap in policy makers’ knowledge base of the importance of the construction sector to the economy of a developing nation such as ours. The statistics that explain the sectors contribution to a nations’ GDP may not be unknown to government, but by all appearances the microeconomic significance certainly is,” he stated. 

Continuing, he stressed; “We wish to state that the cost of construction activities (which are highly dependent on cement in Nigeria) even prior to the recent hike from N1450 to N2100 were expensive enough. With this recent turn of events it will not be inappropriate to say there is the distinct possibility that the price increase will be damaging to the sector.” 

He lamented wastage occurring from collapses across the country.

“We have experienced several cases of building failure in the form of collapse both during and post-construction stages. Various cases have been investigated and some found to be connected with poor concrete mixes. The high cost of cement cannot be ruled out as a contributory factor. With this totally unexplainable increase, we may be in for a bumper season of a grisly harvest of death and injuries, “he said. 

Likening the hike to what obtains in recent times in Kenya, he noted that cement has varied from N1019 to a high of N1482 for a 50kg bag and that in actual fact, the current rate of N1105 resulted from an approximately N100 reduction from the December 2010 price of N1213. In India, the current price is N908, a slight increase from the N875 it was in July 2009. 

“It is obvious to see that cement costs in Nigeria are multiples of rates available elsewhere.” 

He advocated for review of the importation policy to balance local production.

“If vagaries of supply and demand are the key factors, then the importation policy should be reviewed and relaxed to balance the shortfall in local production. This singular measure should bring about a price reduction unless the widely-speculated cartel is the real cause of high prices. Government must provide equal opportunities for all players and prospective new entrants into the sector, so as to positively affect stable prices and ensure only premium quality cement and allied essential building materials are sold locally.“ 

He maintained government must intervene to save the situation from degenerating.

“NIA calls on the relevant authorities to devise ways to ameliorate the effects of these hikes if government cannot eradicate them. The construction sector is too important to toy with. Many lives have been lost and we cannot afford to lose any more,” he stressed.

Also, Engr, Joseph Akintunde corroborated the view of NIA, saying that government should encourage local production of cement by providing the enabling environment for growth.

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