Imported Inflation, FX, Weak Land Use Act Reforms Crippling Construction Sector – Valuers

Nigeria’s construction sector is under severe strain from soaring building material costs, scarce and expensive land, and a weak mortgage system, the Association of Capital Market Valuers (ACMV) has warned.

Speaking to LEADERSHIP, ACMV chairman, Chudi Ubosi, blamed the crisis on inflation and FX volatility, noting that Nigeria’s heavy dependence on imported materials means exchange rate spikes are immediately passed to builders.

He called for urgent reforms to the Land Use Act to make land cheaper and more accessible, alongside stronger patronage of local building materials.

Ubosi stressed that a functional mortgage industry and tailored financing from banks are critical to drive housing demand and construction, while urging better visibility for local research from NBRRI and standardisation of building components like doors and windows to enable mass production.

“The cost drivers of building materials and equipment are primarily inflation. Remember that virtually all we use is imported. The high exchange rates only make them more expensive to import, and these costs are reflected in higher purchase prices,” Ubosi said.

He said fixing the sector requires a coordinated approach involving land administration, local production, mortgage financing and access to credit.

According to him, making land cheaper and more accessible should be a top priority, which would require reforming the Land Use Act to reflect current realities.

“We need to make land cheaper and more accessible, and that means tweaking the Land Use Act to bring it in line with modern-day realities and also to ensure it is in consonance with the aspirations of Nigerians,” he said.

Ubosi urged the government to encourage greater use of locally produced building materials to reduce exposure to FX volatility and imported inflation.

He added that a functional mortgage industry is critical to stimulating construction activity.

“The mortgage industry has to function well because if there is demand, there will be commensurate construction to meet the demand,” he said.

He called on financial institutions to develop tailored products for both developers and prospective homeowners.

“The financial institutions need to play their part in developing products and giving financial services to help both developers and end users,” he added.

On local content, Ubosi acknowledged efforts by the Nigeria Building and Road Research Institute (NBRRI) but questioned the visibility of its research.

“A lot is already being done. NBRRI is doing so much, but how public or available are their results? How many even know of their existence?” he queried.

He advocated greater collaboration between architects, manufacturers and other stakeholders to promote designs that reflect local materials and economic realities.

He said standardisation of building materials and designs would create economies of scale and make local manufacturing more commercially viable.

“If standard doors or windows were a certain height and specification, then companies can go ahead and produce them in large quantities knowing they will be taken up,” he said.

“But today, virtually every property comes with its own design and specifications,” he added, noting that no single intervention would fix the sector.

“It’s all a gamut of so many things coming together,