The Federal Government has been urged to urgently intervene in what seems to be an unending inflation trend that is affecting the construction and real estate sector.
This is just as an alarm has been raised that despite the 3.85 per cent growth the sector recorded in the second quarter of 2021 which grew by 10 per cent year-on-year in Q3 2021 according to the National Bureau of Statistics NBS), the sector has remained low due to inflation which resulted in increased cost of construction and over-dependence on imported building materials.
Making the declaration at the weekend, the Chief Executive Officer (CEO) of Ramos Realty, one of the leading real estate agencies in the country, Mr Adeyinka Ramos, while equally reiterating the need for diversification by his colleagues, lamented how the sector became one of the most hit by the COVID-19 pandemic.
His words: “Since the beginning of the pandemic, the industry has played catch-up and was met by inflation and ever-climbing exchange rates.
“The National Bureau of Statistics (NBS) told us that in 2021 the economy of Nigeria advanced by 4 per cent year-on-year in the third quarter of 2021, following a 5 per cent expansion in the previous year. According to the NBS, we recorded a 3.85 per cent growth in the second quarter of 2021 and grew by 10 per cent YoY in Q3 2021 as well as a sustained positive quarterly YoY growth trend since Q1 2021. However, despite the inviting figures, the real estate and construction industry remained low due to inflation which resulted in increased cost of construction and over-dependence on imported building materials”.
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Ramos, while calling on the government to look into the issue of inflation, he noted that the prices of building materials even within the country have skyrocketed thereby making it difficult for citizens to venture into building their homes but have settled for tenancy which keeps climbing as well.
Aside from the inflationary challenge in the sector, Ramos also noted that the industry has been faced with other issues such as haulage costs, the increase in the price of diesel, exchange rates, port charges for imported materials and a long list of issues affecting the sector.
Speaking on possible solutions to the fast slumping sector, Ramos posited that diversification should be taken a lot more seriously by operatives in the Real Estate and Construction industry while the government tackles bigger issues like inflation.
“If you look at any construction or building work today, you will find that almost 70 per cent of the cost goes into the construction materials, especially iron and other materials. However, if we are able to use materials like wood for things like flooring, wall partitions and the likes, we can make the buildings cheaper and lighter,” he added.
and then