The Nigerian Institute of Quantity Surveyors (NIQS) has decried the negative impact of hyperinflation on the construction industry and called for urgent intervention from the Federal Government to stabilise the sector.

The cost managers bemoaned the astronomical increase in the price of cement, steel rods and other building materials and urged the federal government to open the borders and allow importation of cement to crash the price in the local market.

The institute’s president, Kene Nzekwe, who stated this while addressing journalists in Abuja, stated that the country is currently facing an uncontrollable surge in general price levels, adding that the repercussions are dire, disrupting economic projections and compelling government planners into uncharted territory.

The NIQS President stated that the Nigerian construction industry is at the crossroads as the rising inflation is crippling the construction sector and the general economy, adding that a swift government intervention is imperative to stabilise construction costs and safeguard the future of the nation’s infrastructure development.

He argued that the government should be interested in what happens in the construction industry of the economy as the sector is the barometer, which can be used to measure the direction of economic growth within the economy.

Nzekwe commended the resilience and professionalism of quantity surveyors, who have continued to navigate these challenging times, providing accurate cost estimates and value-engineering solutions to mitigate the impact of hyperinflation.

“However, their efforts alone cannot suffice in these challenging times of hyperinflation of prices of construction materials. The government must step in with strategic interventions to ensure the stability of the construction industry and safeguard the interests of all stakeholders,” he said.

He appealed to the government to stabilise the exchange rate and employ a mix of monetary policies and exchange rate policies to make the Naira competitive globally. According to him, the clamp down on illegal Bureau de Change (BDC) operators should be sustained and the system cleansed to ensure transparency in exchange rate transactions.

Nzekwe urged the government to engage local manufacturers, to mitigate the impacts of the inflation, adding that the knee-jerk reaction of persuading manufacturers to bring down the prices or face dire consequences at this stage may be counter-productive.

NIQS suggested that the government engage local construction material manufacturers to understand and address their challenges, such as exchange rate volatility, which has seen our currency depreciate by about 300 per cent in a few months, thereby affecting the imported components of their manufacturing like spare parts, mining explosives and import tariff.

Nzekwe also advised the government to look at the structure of the building material manufacturing industries, especially cement manufacturing, stressing that the oligopolies and cartels in the construction materials manufacturing industry must be discouraged.

He argued that if the three leading cement manufacturers in the country continue to hold Nigerians to ransom, the only option is for the government to allow cement importation, stressing that a favourable competition in a market will bring about a reasonable price, especially when the government addresses the issues of power and multiple taxation.

According to him, perfect competition should be the aim, aligning local production prices with international standards. The government should incentivise market entry for new producers into the construction material production space by lowering licensing requirements. This is in a bid to boost competition and drive down prices of basic construction materials like cement.

He implored the government to enforce the Executive Order number 5 to promote and improve local content in contracts in the planning and execution of projects and create jobs for Nigerians.

“This will ensure that the desired increase in the quantum of value created in the Nigerian economy through increased Nigerian content in public procurement is realised. The high overheads and other attendant costs charged to contracts in favour of expatriate staff, which is usually charged as a percentage of the total contract sum, is discarded, giving rise to more reasonable construction costs,” he said.