Economic experts have said that moves by the Chairman of BUA Cement Plc, Abdul Samad Rabiu and the Chairman of Dangote Cement Plc, Aliko Dangote to slash cement prices of Renewed Hope projects will reduce the cost of owning homes.
The CEO of NorthCourt Real Estate, Ayo Ibatu, and the Industrial Goods Analyst, Vevita Capita Management, Abigail Alabi, said this in reaction to moves by cement manufacturers.
Last week, Dangote and Rabiu announced after a meeting with President Bola Tinubu that they would freeze any cement price increase for all contractors engaged in projects under the Federal Government’s Renewed Hope agenda.
Dangote said, “We have decided that we are going to freeze the price of cement for any contractor that is involved with the Renewed Hope projects.”
Similarly, Rabiu said, “There will be no increase for the foreseeable future. This is our contribution to support Mr President’s Renewed Hope Initiative.”
Analysing the impact of the decision, the CEO of NorthCourt Real Estate, Ayo, said during an interview that the country faces an affordable housing challenge.
Checks by THE WHISTLER showed that the housing gap has grown to about 28 million.
Ayo said, “They are committing as market leaders to take the heat despite circumstances that ordinarily would have forced them to increase prices beyond N10,000
“It is for a good course and it is restricted to Renewed Hope Estate contractors.”
He argued that the deal needs monitoring to avoid abuse, which will discourage new entrants in the cement market.
He said cement accounts for about 40 per cent of building cost.
“What this does is that it allows for long-term planning. We can do forward contracts and execute them quickly enough. We need to start seeing projects being done as a result of this commitment from market leaders.
“The idea here is to aggregate these costs and then ensure that the funds saved are not held by the developers in terms of expanded profit margins but passed down to end users in terms of reduced pricing per unit of housing.”
Industrial Goods Analyst at Vevita Capita Management, Alabi, said the development will affect the profit margins of cement makers.
Abigail acknowledged that the decision of the cement producers will benefit Nigerians when it comes to the pricing of the affected projects.
