Building materials markets and construction industry generally are among sectors that have been predicted to thrive in the last quarter of 2023. Managing Director/Chief Executive Officer, Fame Oyster and Co, Mr Femi Oyedele, in this interview with DAYO AYEYEMI, spoke on factors that will trigger activities in the sector during the period.
According to the latest report from Bismarck Rewane-led Financial Derivatives Company, building materials and construction have been identified among sectors that will thrive in the last quarter of the year (2023). What is your opinion?
Building materials markets and construction industry generally are among sectors that will thrive in this last quarter of the year (2023) and the signs are there already.
Do you agree with the prediction?
I agree with the prediction because the Monetary Policy Committee of the Central Bank of Nigeria (CBN) is planning to increase the interest rate soon. This is due to the high inflation rate in the country. Investors will chose to hedge their funds in properties, shares, bonds and time deposit to benefit from capital appreciation.
The government is planning to construct 7,000 houses in seven northern states of Benue, Kaduna, Katsina, Kebbi, Niger, Sokoto and Zamfara. The majority of the amount that is being saved by oil subsidy removal will be spent on physical infrastructure development.
Renovations of the buildings of federal higher institutions and construction of roads means the construction sector will do well than the average performance of all sectors.
What are the driving factors?
The likely driving factors are the products of the building materials markets and the construction industry are basic needs of man.
They are also necessities in all other sectors. Agriculture sector needs housing for residences of workers, warehouses for storage and roads for transport of produces and raw materials. Housing is a bundle of joy and in most culture, its possession is seen as being successful.
Every adult aim and strive to construct houses and governments see construction as a performance measuring factor by the general public. Governments, therefore, compete with each other to deliver construction projects.
How will this impact on affordable housing production, employment generation and economy, considering high cost of other items such as land, labour and cost of borrowing?
This measure will not impact on affordable housing production since governments are not going to direct the construction projects to provide affordable housing.
Affordable housing in Nigeria, a very poor country, means either subsidised or social housing. Researchers posited that construction job of three bedroom bungalow development alone can generate job for five people at least. This is not considering the food sellers that will sell food to the workers and the building materials workers. Nowadays, the POS operators also get jobs a result of construction projects. The construction will provide temporary employment generation for people and temporarily boost the economy. Considering high costs of other items such as land, labour and cost of borrowing, individuals may not be able to participate in the construction of houses but government and private organisations will increase their tempo.
What should be the role of government?
The role of governments in ensuring housing adequacy should be to increase the number of houses being constructed and aimed at creating employment for people. These construction should be aimed to provide farm settlements with large holdings. Minimum holding should be five hectares per farmer.
Government should embark on social housing for the abject poor who spend less than $2 equivalent a day. Government should engage professionals in the provision of consultancy services so that the money can spread across all citizens.
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