RMRDC in resolved move to save Nigeria N13.6trn on building materials importation
Research has shown that Nigeria spends trillions of naira to import 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 boost the Gross Domestic Product (GDP). BINTA SHAMA reports.
The building and construction industry is one of the most important sectors of any given economy. The significance of this industry is often measured by its contribution to the 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 with abundant available basic building materials such as clay, laterite, limestone, agro-industrial waste, wood/timber, granite, various types of sand including glass sand in their natural state, the contribution of this sector to the Gross Domestic Product (GDP) is expected to be high and significant. However, the sector contributes only 30 per cent to the GDP which is far less than 70% recommended by the World Bank.
The World Bank has estimated that Nigeria would need to invest $3 trillion to reduce the infrastructure deficit in the country. According to the National Integrated Infrastructure Master Plan, (NIIMP), the federal government has initiated a 30-year infrastructure plan with a target date of 2043. The plan aims to bring Nigeria’s infrastructure stock to the 70% of GDP level. As at now, construction projects in Nigeria are driven by both the government and private investors. The government provides key infrastructure such as roads, bridges, dredged water ways, ports, and railways via full government financing, multilateral development banks (MDBs), and bilateral creditors.
Increasing cost of infrastructure projects
Due to the increasing cost of key infrastructure projects and dwindling government financing, the use of public-private partnerships PPPs as a tool to finance projects has also become imperative. Likewise, government has obtained Senate approval to secure about $22 billion external loans for key infrastructure projects in the National Integrated Infrastructure Master Plan. Based on the proposed share of investment across critical sectors in Nigeria, the housing sector is expected to account for 11% of this fund, while transportation will account for 25% of infrastructure investments. With Nigeria’s population growing at a rate of over 2.5% per annum, and an expected population of 400 million people by 2050, the NIIPM is expected to mitigate the current housing deficit of 17 million houses by building a minimum of 700,000 houses per year instead of the current 2,000 houses being built on an annual basis.
To facilitate and increase activities in the sector, financing and mortgage lending have been instituted in Nigeria as several financial institutions, including the Nigerian Mortgage Refinance Company, have increased their capacity in the affordable housing market through the provision of loans and advances of over $3.4 billion to customers. The federal government in its bid to support the mortgage industry, has waived the initial 10% payments on mortgages below 5 million naira provided by the Federal Mortgage Bank. In addition, the government has set up the Family Homes Fund, a $1.57 billion fund, to construct two million social housing units through PPPs.
The Compound Annual Growth Rate
As a result of the intervention by the federal government, the building and construction industry is expected to record a Compound Annual Growth Rate (CAGR) of 13.9% to reach NGN 10671.3 billion by 2024, while residential construction industry in value terms increased at a CAGR of 4.2% during 2015-2019. The commercial building construction market in value terms is also expected to record a CAGR of 12.5% by 2024. As a way of enhancing development in this sector, a large share of the 2022 budget was given to four critical sectors of which infrastructure is one. Infrastructure development was allocated N1.45 trillion, representing 8.9 percent of the N16.39 trillion budget.
N13.6trn spent on importation of raw materials
However, Studies conducted by the Raw Materials Research and Development Council (RMRDC) shows that between 2010 and 2015, Nigeria spent N13.6 trillion on the importation of raw materials, especially building materials, that could have been sourced locally if some more rigorous work had been put into the country’s import substitution strategy. Statistics also show that Nigeria, in 2016, spent about another N5.89 trillion on the importation of similar raw materials, thus bringing the total sum spent on the importation of raw materials and finished products into the country within the seven-year period to N19.5 trillion. This means that on the average, the country expended N2.79 trillion every year in the seven years period covered by the study to import building materials and other raw and finished materials.
One of the major ways the country can reduce the high cost of conventional construction materials such as concrete, cement and steel, is to promote the use of alternative construction materials. At the global level, different solid wastes that are generated in large quantities, are now being used as full or partial replacement for conventional materials in many developed countries. For instance, 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. Apart from reduction in cost, this initiative is being promoted as production of cement and steel has significant environmental consequences. Production of cement, has contributed immensely to climate change and global warming as it accounts for approximately 7% of the anthropogenic CO2 emissions worldwide.
RMRDC partnering for alternative means
A lot of innovative research and development is ongoing in Nigeria, to make the use of local materials and to reduce cost of building materials in the country. The Nigerian Building and Road Research Institute (NBRRI) has launched cement stabilized bricks technology with which it built classes at the Pastoral Resolved Centre of the National Commission for Nomadic Education (NCNE). The use of the material reduced the cost of construction drastically. NBRRI has also developed building materials like pozzolana, mardotile roofing, and varieties of machines for their production. The products reduce the cost of production of mortar and concrete, reduce heat of hydration and reduction on effects of alkali aggregate reactivity.
Available information showed that the first pozzolana plant in Nigeria has been commissioned. Likewise, based on the research carried out at the Raw Materials Research and Development Council, limestone is now being used for finishing of buildings in Nigeria. The Council has also developed alkyd resin from local sources for production of paints. One of the major problems constraining the utilization of locally available wood in the building and construction sector is that wood processors find it difficult to season wood to about 12% moisture content or below. This problem has largely been solved by the development of wood seasoning kilns by RMRDC in collaboration with Scientific Equipment Development Institute, Enugu and Palcon Nigeria Limited, also based in Enugu.
Study on bamboo availability and utilisation
The Council has carried out a study on bamboo availability and utilization in Nigeria. The study indicated that despite wide availability of bamboo in the country, it is not being significantly processed at 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, moat especially, Gamla Nigeria Limited in Asaba, to establish bamboo plantations and plantations of indigenous economic hardwoods species required in the building and construction sector of the economy. The Council is presently collaborating with the New Material Nigeria Company Limited a member of the China National Building Materials Group (CNBM) wholly owned by the government of China which has introduced a new innovative construction material known as Fiber Cement Board into the Nigerian market.
This makes Nigeria the first country outside China where an alternative to gypsum board is being manufactured. The fibre cement board is resistant to weather, water and fire. It is sound proof, shatter resistant, flexible, termite resistant and cost lower than normal bricks. The Fibre Cement Board is a made out of a composite of cement, cellulose fibres like paper pulp, quartz stones and sand. They are used in building construction as walls, partitioning, roofing and flooring. It can be used for internal wall partitioning as well as exterior wall cladding. As good insulators of heat and sound, they are preferred to the solid cement block or bricks commonly used. The locally produced Fibre Cement Board provides an alternative to gypsum board and mitigates capital flight as gypsum is imported annually to the tune $132million into the country. More recently, the Council initiated collaboration with Ifrique Eco Solutions towards producing eco-interlocking tiles.