Macroeconomic headwinds, particularly inflation, rising raw material and shipping costs, and exchange-rate volatility, are fuelling concerns in Nigeria’s facility management sector, with mounting pressure on maintenance budgets emerging as one of the biggest risks to service delivery. Operators are increasingly caught between rising operating costs, weakening purchasing power and the challenge of retaining tenants who are struggling to afford higher service charges in commercial facilities, VICTOR GBONEGUN reports.

Rising operating costs are putting increasing pressure on Nigeria’s facility management sector, with surging energy, labour, maintenance and logistics expenses making it increasingly difficult for operators to stay within approved budgets while maintaining service quality.

Facility managers and property experts warned that persistent inflation, rising diesel and electricity costs, and higher prices of spare parts and other inputs have significantly increased the cost of maintaining residential estates and commercial properties.

For operators of commercial facilities in Lagos, Abuja, and other major cities, preventive maintenance has become increasingly difficult to carry out. Many are reviewing maintenance budgets and service charges, among other measures, to sustain essential services.

Facility managers are contending with rising diesel prices, increasing vendor costs, expensive spare parts, persistent power supply challenges and growing operational expenses, even as they are expected to maintain facilities with minimal or no downtime.

Essentially, facility management maintenance budgets in Nigeria cover routine servicing of generators, Heating, Ventilation, and Air Conditioning (HVAC) and air-conditioning systems, lifts and fire safety systems, as well as unplanned repairs involving burst pipes, electrical faults and sudden equipment failures.

They also cover safety inspections, fire equipment certification, environmental and waste management fees, filters, oil, replacement bulbs and basic repair materials, technical support for complex mechanical and electrical systems, and wages for in-house technical staff.

The Guardian gathered that maintenance costs have risen by more than 100 per cent in the past year.

Nigeria’s headline inflation stood at 20.12 per cent in August 2025, while the latest official figure stood at 15.91 per cent in June 2026, according to data from the National Bureau of Statistics (NBS).

Although inflation appears to be easing, this has not translated into lower prices for materials and maintenance inputs. The situation has also been compounded by geopolitical tensions, which have affected global supply chains and shipping costs. The cost of energy has been particularly affected, as have the replacement costs of lifts and other equipment whose prices are dollar-linked.

The sharp rise in costs has made it difficult to prepare budgets that adequately account for increases in raw materials, labour and utilities. Funding constraints in a volatile economy are also making it increasingly difficult for operators to sustain services without interruptions.

Industry sources said Band A electricity tariffs had risen to about N209.5/kWh since 2024, while generator use continued to drain facility management budgets. Inflation has also pushed up salaries, spare parts and consumables, with many items repriced several times within a year. About 70 per cent of facility management equipment and spare parts are imported, exposing operators to naira volatility and higher foreign exchange costs.

For many commercial buildings, energy now accounts for about 45 to 55 per cent of the total facility management budget, manpower about 30 per cent, maintenance and consumables 15 to 25 per cent, while administration accounts for about 10 per cent.

Diesel prices rose from N844.28 per litre in May 2023 to between N1,600 and N1,750 by mid-2026, driven by foreign exchange pressures, subsidy removal and higher global crude oil prices. HVAC components, which are critical to commercial buildings, are also largely dollar-priced, while the naira-dollar exchange rate has remained around N1,400 to the dollar.

Technicians’ and artisans’ salaries have also increased significantly as employers seek to retain workers amid rising living and transportation costs. “Imagine maintenance budget was set in August 2024. By January, diesel had gone up again. The dollar rate moved. By June, the lift parts you ordered cost over 40 per cent more,” a facility manager told The Guardian.

The result is that maintenance budgets that once covered preventive servicing, cleaning, security and power can now barely cover diesel and workforce salaries. A six-floor office tower in Abuja that operated on a maintenance budget of about N30 million monthly two years ago can no longer function efficiently on that allocation, with its monthly requirement now estimated at N60 million.

The crisis in Nigeria’s facility management sector means that keeping a mall operational can cost twice as much as it did five years ago, while existing budgets have failed to keep pace. Some landlords are finding it difficult to increase service charges without risking tenant losses, forcing others to renegotiate charges and service arrangements with tenants.

Speaking on the impact of geopolitical tensions, particularly the Middle East crisis, on facility management, the Chief Executive Officer, Solid Foundation Group, Adetoun Otepola, said rising oil prices had put significant pressure on energy and maintenance costs.

She said energy had become the single most expensive component of daily facility maintenance, with diesel accounting for a major share of expenditure on power for common areas, water treatment plants, security systems and other essential services.

“The price of diesel has gone up. Diesel comes first in the maintenance costs that you have. We use it to power common areas for electricity, water treatment plants, security systems and other essential services. So, maintenance costs are on the rise.

“Even the costs of lubricants, spare parts and logistics have gone up considerably. People are asking for more wages. I would say that diesel has experienced the most significant cost pressure, followed by maintenance and electricity. So, the overall effect is a noticeable increase in service delivery costs, reinforcing the need for energy-efficient systems,” she said.

Experts said managing facilities during economic instability now requires smarter vendor negotiations, closer monitoring of energy consumption, reduction of waste and operational leakages, and proactive emergency planning.

The Managing Director, West Norwood Realty, Alfred Osagie, said facility managers were finding it increasingly difficult to keep to maintenance budgets, noting that maintenance costs had risen by an average of 30 per cent year-on-year over the past three years due to persistent inflation.

Osagie said many property owners set budgets without fully understanding the resources required to sustain their facilities.

“Properties and estates are like humans. If somebody is sick and the person goes to the hospital, the doctor will not ask how much is in your account. The challenge is that people go into estates without understanding what it requires, and so there is always pressure to be able to work with a particular amount,” he said.

He noted that while fuel and electricity costs were allowed to rise, facility management costs were often expected to remain unchanged, despite being driven by labour, materials and other resources whose prices were outside the control of facility managers. “Facilities are designed by the developer, and most developers do not consider life-cycle costs,” he said.

Osagie stressed the need for facility managers to negotiate better with vendors before preparing annual budgets and to involve residents and tenants in the budgeting process. “The budget must be done with the residents. They must understand why, where materials are purchased from and what we are using them for. It makes it easier to match the level of service to the quality of the asset, the maintenance demand of the asset and the financial capacity of the facility management companies,” he said.

A past president of the International Facility Management Association (IFMA), Nigeria Chapter, Olalekan Akinwumi, said rising maintenance costs had also made budget compliance difficult, stressing the need for transparency.

He urged facility managers to provide tenants with quarterly maintenance reports and introduce measures to reduce power losses. “The key word in budgeting is transparency. If people somehow feel that they don’t really understand what you are doing, then you are creating problems. Service charge is something that is a headache. At the same time, when you are transparent with it and you carry them along, they will understand,” he said.

Akinwumi advocated alternative power sources and staggered generator hours to reduce diesel consumption.

“It’s like when you want to run an 18-hour generator and your budget cannot carry it, then you have to inform the users. You augment with the inverter because the cost of diesel is high. If it is a commercial building, you go on inverter or solar and then reduce the energy on generator, so that instead of running 18 hours, you run down to six hours,” he said.

Chairman of the Nigerian Institution of Facilities Engineering and Management, Christopher Egwuatu, also said the rising cost of materials, labour and services had made maintenance budgeting increasingly difficult.

“The income most tenants make is still stagnant. But the cost of things and other activities in the market are increasing per second. So, definitely, it does not really help in delivering services,” he said.

Egwuatu warned that attempts to cut costs through substandard materials could compromise safety and service quality. He urged property owners to engage qualified facility management professionals and said awareness of global inflationary pressures would help practitioners develop better cost-management strategies.