Nigeria can cut construction costs through local production – Chime

Nigeria's construction sector is grappling with substantial cost increases driven by persistent inflation and volatile exchange rates, according to Jude Chime, CEO of Elan Exhibitions West Africa Limited. Contractors, developers, and suppliers report dramatic changes in the cost of doing business over the past two years, with sharp price hikes for essential components like steel, electrical cables, and imported systems. Quotations prepared at project initiation are often invalidated by rapid price movements, creating uncertainty and leading to project reviews or delays.

“

There’s no doubt the impact has been significant. If you speak to any contractor, developer or supplier today, they’ll tell you that the cost of doing business has changed dramatically over the past two years.

Fixed-price contracts have become particularly challenging, forcing contractors to absorb unexpected material cost increases and squeezing profitability. International manufacturers are also demanding payments in foreign currency or shorter payment terms, adding further pressure on Nigerian businesses. These economic reforms, including the removal of fuel subsidies and liberalization of the foreign exchange market, have directly increased transportation, logistics, imported material, and financing costs.

“

Many projects have had to be reviewed or delayed as developers work to accommodate higher construction costs.

However, these difficulties are also fostering innovation within the industry. Companies are increasingly looking for local alternatives where quality permits, strengthening procurement strategies, negotiating more flexible contract terms, and enhancing financial risk management. Chime views this situation as a critical opportunity for Nigeria to accelerate the local manufacturing of construction materials, thereby reducing its exposure to external economic shocks and fostering sustainable growth.

“

I also believe this is an opportunity for Nigeria to accelerate local manufacturing of construction materials so we are less exposed to external shocks in the future.