Address cement manufacturers’ concerns
A few days ago, the Minister of Works, David Umahi, met with cement manufacturers and they agreed to reduce the price of a bag of cement to N7000. The cement manufacturers had said the high cost of gas, high import duty on spare parts, poor road networks, high foreign exchange rates, and cement smuggling to neighbouring nations are some of the issues causing the astronomical rise in the price of cement in the country. While the Federal Government has said the Federal Ministry of Industry, Trade, and Investment will seek remedies from President Bola Tinubu regarding gas costs and import duties, the Federal Ministry of Works will prioritise road repairs, especially around manufacturing locations.
The government has also said regarding cement smuggling, the Ministry of Works will intensify engagement with the National Security Adviser, Nuhu Ribadu, and anticipates a price drop after addressing these challenges and will reconvene after 30 days to review progress on the matters discussed. Representatives of Dangote Cement Plc, BUA Cement Plc, Lafarge Africa Plc, and other members of the Cement Producers Association were present at the meeting. My submission on this is that the government should be more intentional about resolving the concerns of the cement manufacturers. It should not be the usual talk without action. This is the time to talk and do. The target should be for cement to drop to less than N5,000 per bag.
Consider tax, import duty waivers
For building materials that are imported into the country, this is the time for the government to start looking at tax and import waivers or rebates. According to the Nigerian Building and Road Research Institute, the country imports about 90 per cent of the materials used in the construction of buildings and roads across the country. The reality of this fact is that importers of these products need support at this time of extreme forex crisis, while we work towards encouraging and developing local production.
Partner with reputable real estate developers
The government at all levels must immediately start looking at sustainable and actionable partnerships with reputable real estate development companies. The partnership can come in the form of financial grants, land allocation and facilitation of proper documentation and titles to their properties. One of the best ways to work with private real estate developers is to get the Real Estate Developers Association involved. As a body of real estate developers in Nigeria, REDAN will be able to facilitate shared resources, intelligence, and materials and encourage collaborations among members that can engender affordable development and delivery of homes to Nigerians.
In the business of real estate development, experience shouldn’t be discountenanced. The Federal Mortgage Bank of Nigeria and the Federal Housing Loan Board must rewrite and review their operational models. Realistic and accessible housing schemes should be developed for middle- and low-income earners using the Private-Public Partnership model with competent real estate developers. Housing products for this class of Nigerians have become almost impossible. The eligibility criteria should be reviewed. The pricing should be subsidised and the government must approach housing for Nigerians as a form of social investment.
In the United States of America for example, the Department of Housing and Urban Development administers the Self-Help Homeownership Opportunity Program, which is a competitive federal grant programme that awards funds to eligible non-profit organisations to help develop affordable housing units for purchase by low-income families. In Nigeria, it cannot and should not be about profit-making. Substantial amounts of funds saved from subsidy removal from petrol can be channelled towards building houses for the poor. The time to act is now.
Oshundairo, a real estate developer and CEO of Arc-View Investment Limited, writes from Lagos