Research has shown that Nigeria spends billions of naira on importing raw materials, especially for building and construction, to which the Raw Materials Research and Development Council (RMRDC) is working hard to develop local building materials , reduce the cost of construction and increase the gross domestic product. (GDP). Reports by BINTA SHAMA.
The building and construction industry is one of the most important sectors of any given economy. The importance of this industry is often measured by its contribution to gross domestic product (GDP). Globally, the value of the building and construction sector is expected to grow from $34 trillion in 2021 to $85.1 trillion in 2025.
Low contribution to GDP
Nigeria has an abundance of basic building materials such as clay, laterite, limestone, agro-industrial waste, timber, granite, various types of sand including glass sand at the n its natural state, the contribution of this sector to the gross domestic product (GDP) should be high and significant. However, the sector only contributes 30% to GDP, which is well below the 70% recommended by the World Bank.
The World Bank has estimated that Nigeria would need to invest $3 trillion to reduce the country’s infrastructure deficit. According to the National Integrated Infrastructure Master Plan (NIIMP), the Federal Government has launched a 30-year infrastructure plan with a target date of 2043. The plan aims to bring Nigeria’s infrastructure stock to the level of 70% of GDP . Currently, construction projects in Nigeria are driven by both government and private investors. The government provides key infrastructure such as roads, bridges, dredged waterways, ports and railways through full public financing, multilateral development banks (MDBs) and bilateral creditors.
Increase in the cost of infrastructure projects
Due to the increasing cost of key infrastructure projects and decreasing public funding, the use of PPP public-private partnerships as a project financing tool has also become imperative. Similarly, the government secured Senate approval to obtain external loans of approximately $22 billion for key infrastructure projects in the National Integrated Infrastructure Master Plan. Based on the proposed share of investment in critical sectors in Nigeria, the housing sector is expected to account for 11% of this fund, while transport will account for 25% of infrastructure investment. With Nigeria’s population growing at a rate of over 2.5% per year and a projected population of 400 million people by 2050, the NIIPM is expected to alleviate the current housing deficit of 17 million houses by constructing a minimum of 700,000 houses per year instead of the current 2,000 houses are built each year.
To facilitate and increase business in the sector, finance and mortgage loans have been instituted in Nigeria, several financial institutions including the Nigerian Mortgage Refinance Company have increased their capacity in the affordable housing market by providing loans and advances over $3.4 billion. to customers. The Federal Government, in its attempt to support the mortgage industry, has waived 10% upfront payments on mortgages below N5 million provided by the Federal Mortgage Bank. In addition, the government has set up the Family Homes Fund, a $1.57 billion fund, to build two million social housing units through PPPs.
Compound annual growth rate
As a result of federal government intervention, the building and construction industry is expected to register a compound annual growth rate (CAGR) of 13.9% to reach NGN 10671.3 billion by 2024, while that the homebuilding industry in value increased at a CAGR. by 4.2% over the period 2015-2019. The commercial building construction market by value is also expected to register a CAGR of 12.5% by 2024. In order to enhance the development of this sector, a significant portion of the 2022 budget has been allocated to four critical sectors, including infrastructure. Infrastructure development was allocated N1.45 trillion, or 8.9% of the N16.39 trillion budget.
N13.6 trillion spent on importing raw materials
However, studies by the Raw Materials Research and Development Council (RMRDC) show that between 2010 and 2015, Nigeria spent N13.6 trillion on importing raw materials, especially building materials, which could have been of local origin if more rigorous work had been incorporated into the country’s import substitution strategy. Statistics also show that in 2016, Nigeria spent an additional N5.89 trillion on importing similar raw materials, bringing the total sum spent on importing raw materials and finished goods to N19. the country over the seven-year period. 0.5 trillion. This means that, on average, the country spent N2.79 trillion every year over the seven-year period covered by the study to import building materials and other raw and finished materials.
One of the main ways the country can reduce the high cost of conventional building materials such as concrete, cement and steel is to promote the use of alternative building materials. Globally, various solid wastes generated in large quantities are now used as a total or partial replacement of conventional materials in many developed countries. For example, ashes from industrial and agricultural wastes such as fly ash and rice husk ash are used as pozzolan to partially replace cement in concrete production. In addition to cost reduction, this initiative is promoted because the production of cement and steel has significant environmental consequences. Cement production has contributed enormously to climate change and global warming, as it accounts for around 7% of anthropogenic CO2 emissions worldwide.
The RMRDC joins forces for alternative means
A lot of innovative research and development is going on in Nigeria, to use local materials and reduce the cost of building materials in the country. The Nigerian Roads and Constructions Research Institute (NBRRI) pioneered cement-stabilized brick technology with which it constructed classrooms at the Pastoral Resolute Center of the National Commission for Nomadic Education (NCNE). The use of the material significantly reduced the cost of construction. The NBRRI has also developed building materials like pozzolana, mardotile roofing and varieties of machinery for their production. The products reduce the cost of producing mortar and concrete, reduce the heat of hydration and reduce the effects of alkaline aggregate reactivity.
Available information showed that the first pozzolana plant in Nigeria has been commissioned. Similarly, based on research conducted at the Raw Materials Research and Development Council, limestone is now used for finishing buildings in Nigeria. The Council has also developed an alkyd resin from local sources for the production of paints. One of the main problems limiting the use of locally available wood in the building and construction sector is that wood processors find it difficult to dry wood to a moisture content of around 12% or less. This problem has largely been solved by the development of wood drying kilns by the RMRDC in collaboration with the Scientific Equipment Development Institute, Enugu and Palcon Nigeria Limited, also based in Enugu.
Study on the availability and use of bamboo
The Council carried out a study on the availability and use of bamboo in Nigeria. The study indicated that despite a large availability of bamboo in the country, it is not significantly processed at an industrial level. As a result, the Council is collaborating with private sector investors to produce bamboo wall and floor tiles. To consolidate these efforts, the Council is also collaborating with some private sector investors, especially Gamla Nigeria Limited in Asaba, to establish bamboo plantations and plantations of native economic hardwood species needed for the building and construction sector of the economy. The Board is currently collaborating with the New Material Nigeria Company Limited, a member of China National Building Materials Group (CNBM) 100% owned by the Chinese government, which has introduced an innovative new building material known as Fiber Cement Board on the Nigerian market.
This makes Nigeria the first country outside of China where an alternative to plasterboard is being manufactured. Fiber cement board is weather, water and fire resistant. It is soundproof, unbreakable, flexible, termite resistant and costs less than normal bricks. Fiber cement board is made of a composite of cement, cellulose fibers like paper pulp, quartz stones and sand. They are used in the construction of buildings as walls, partitions, roofs and floors. It can be used for interior wall partitioning as well as exterior wall cladding. As good heat and sound insulators, they are preferred over commonly used solid cement blocks or bricks. Locally produced fiber cement board provides an alternative to gypsum board and mitigates capital flight, as gypsum is imported annually for $132 million into the country. More recently, the Council initiated a collaboration with Ifrique Eco Solutions for the production of eco-interlocking tiles.