Nigeria’s 70 per cent reliance on imported building materials is leaving the housing market dangerously exposed to crippling supply and currency shocks, the State of Lagos Housing Market Report (Volume 3) has warned.
According to the report, Nigeria’s abundant raw materials still fall short of reducing reliance on imports due to limited local processing capacity.
It stated, “A staggering 70 per cent reliance on imported building materials exposes the market to global supply chain disruptions and currency volatility.
It reads, “To foster a more stable and efficient building materials market, the report recommends a multi-pronged approach: enhancing local production through manufacturing hubs and incentives, optimising supply chains, implementing consistent policy reforms, promoting sustainable and innovative building practices, and actively attracting both domestic and foreign investment. These measures are crucial not only for stabilising prices but also for addressing Nigeria’s severe housing deficit and ensuring sustainable economic development.
“Lagos, as Nigeria’s preeminent economic hub and most populous city, serves as the epicentre of construction and real estate activities within the nation. The dynamics observed in its building materials market often foreshadow or mirror broader national trends, making its analysis critical for understanding the broader Nigerian context. The construction industry across Nigeria is currently on a significant growth trajectory, with projections indicating an annual increase of eight per cent, poised to reach NGN 25.72 tn by 2025. This sector has demonstrated robust expansion, achieving a Compound Annual Growth Rate of 12.1 per cent between 2020 and 2024, with forecasts suggesting a continued ascent at a CAGR of 6.4 per cent from 2025 to 2029, culminating in an estimated value of NGN 35.38 tn by the end of 2029.
“Several factors underpin this market expansion. Rapid urbanisation and a burgeoning population in Lagos are generating substantial demand for new housing units, commercial spaces, and critical infrastructure. Furthermore, government commitment to infrastructure development, exemplified by projects such as the Lagos Rail Mass Transit and various road expansions, is expected to significantly boost property values and overall demand within the construction sector.
“Rising material costs, persistent inflation, bureaucratic impediments, and high financing expenses are recurrent issues in the housing sector. Supply chain disruptions and escalating costs already present significant hurdles, while material costs and currency volatility continue to pose substantial challenges.”
The report further noted that while the construction industry in Nigeria, particularly in Lagos, shows robust growth projections driven by high demand and substantial government investment, this potential is simultaneously constrained by escalating input costs.
It added, “The market’s expansion in value is heavily influenced by these price increases rather than purely volume-driven growth. This situation suggests that while the capacity for growth is evident, the efficiency and affordability of this growth are severely compromised by fundamental structural issues within the building materials market. The underlying affordability and supply challenges are masked by the rising monetary value of the sector.
“Given Lagos’s status as the primary economic and construction hub, it is observed that national trends and challenges, such as inflation, currency depreciation, and supply chain inefficiencies, are acutely felt and often amplified within the city. This implies that any effective intervention or improvement within the building materials market in Lagos could serve as a vital blueprint for broader national reforms. Addressing these issues in Lagos could provide a critical first step towards improving the wider Nigerian construction landscape, as the city’s market dynamics are not only representative of but also significantly contribute to the overall national context.”
The report further noted that the period between 2015 and 2025 has witnessed a dramatic escalation in the prices of essential building materials in Lagos, Nigeria, with a particularly sharp acceleration from 2023 onwards.
“In September 2015, reinforcement steel (iron rod) prices in Lagos exhibited variations based on size and origin. For instance, an 8mm local brand iron rod was priced at N87,000 per 133 units, while its imported counterpart cost N102,000. A 12mm local iron rod was N98,000 for 93 units, with the imported version at N152,000.
“By 2023, the cost of iron rods (ranging from 10 mm to 16 mm) had surged to N800,000 per tonne. The period from May 2023 to May 2024 saw an even more pronounced increase: a 12mm iron rod escalated from N8,000 to N19,000, a 16mm rod from N4,800 to N11,500, a 10mm rod from N3,600 to N9,500, and an 8mm rod from N2,500 to N6,500. By 2024, iron rods (10 mm to 16 mm) had reached N1,600,000 per tonne or more, representing a 100 per cent increase from 2023. This upward trend continued into 2025, with reports indicating that iron rods and aluminium products had ‘almost doubled’ in price.”
The State of Lagos Housing Market, 3rd Edition, is published by the Roland Igbinoba Real Foundation for Housing and Urban Development. The first and second editions were published in 2009 and 2016, respectively.
