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Real Estate and Construction

Building materials exported in Q4 2020 dropped by N222.26 billion

Building materials exported from Nigeria dropped by N222.26 million, as it fell to N459.31million in the fourth quarter of 2020.

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The worth of the building materials exported from Nigeria dropped by N222.26 million, falling to N459.31 million in Q4 2020 from N681.57 million recorded in Q4 2019.

The export data rose from N702.5 million in Q4 2017 to N1.09 billion in Q4 2018.

In the quarter under review, the total merchandise trade in the country stood at N9.12 trillion, representing 8.9% over the level recorded in Q3, 2020 but 9.9% lower when compared to Q4, 2019.

READ: CBN’s Export Proceed Number causing huge setback for exporters

These were disclosed by the National Bureau of Statistics (NBS) in its Q4 2020 trade report.

It added that the value of cement, asbestos, articles of stone, mica, and ceramic imported in the fourth quarter of 2020 stood at N31.07 billion. The value of trade in Q4 was the highest recorded over the past year, the NBS stated.

“The export component of trade stood at N3.19 trillion, an increase of 6.7% over the preceding quarter but a drop of 33% over the previous year. The share of exports in total trade declined to 35% in Q4, 2020 from 47% a year earlier. 

“The total imports reached a record high at N5.92 trillion in Q4 2020, an increase of 10.1% over the preceding quarter, and 10.8% over the preceding year,” the report stated.

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The report also added that imports accounted for 65% of total trade in Q4 2020, compared to 53% the previous year.

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READ: Agric import rose to N532.4 billion in Q4 2020, as Asia led Nigeria’s export destination

What it means

  • The value of imports nearly doubled the value of exports, as the trade deficit rose to its highest level and a fifth consecutive quarterly deficit of N2.73 trillion, an increase of 14.30% compared to the preceding quarter, was recorded.
  • On an annual basis, total trade was valued at N32.42 trillion in 2020, or 10.3% less than the value recorded in 2019.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Real Estate and Construction

Why rents increased by 30% in Lagos, border towns

Factors responsible for the hike are rising cost of building materials, lack of transparency between asking and achievable prices.

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Rents across Lagos (Mainland and Island) and Ogun State have increased by over 30% between December 2020 and April 2021.

Findings by Nairametrics revealed that while rent had increased by over 30% in some Lagos border towns like Sango-Ota, Arepo and Magboro, property owners across Yaba, Magodo, Ikoyi, and Lekki axis also inflated their rents by about 33% within the same period.

For instance, rents for one-bedroom (self-contain) and two-bedroom apartments, which are the most sought after in Magboro (one of the Lagos border towns) have increased from an average of N120,000 and N160,000 to N200,000 and N260,000 respectively. This represents a 33.33% and 30% increase respectively.

READ: Why property prices are expensive in Lagos

Similarly, rents in some key areas in Lagos Mainland are not cheaper. In Magodo phase 2, property owners charged between N1 million and N1.2 million for a 2-bedroom apartment, but now, a potential tenant is required to pay between N1.3 million and N1.56 million as rent (depending on how old the house is), an increase of approximately 30%.

Though rents appear relatively cheaper in Surulere, especially around Aguda, they also increased within the period under review. While rent on two-bedroom apartments and three-bedroom in Aguda has gone up from N850,000 and N1 million to N1.2 million and N1.4 million respectively, around Ogunlana drive, two-bedroom apartments that were let out at N950,000 now cost about N1.2 million.

Meanwhile, rents around the Lekki axis have also gone northward, as new tenants are forced to pay more before occupying houses. A 4-bedroom semi-detached house without boys quarters in Lekki Phase 1 and Ajah, which used to cost N3.8 million and N2 million, has risen to N4.5 million and N2.5 million respectively.

In Sangotedo, rent on three-bedroom flats has also increased from N1.2 million as of December 2020 to N1.6 million.

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READ: Lagos State Government offers 15% Discount on Land Use Charge Payments

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Why the rise?

Industry experts, who spoke with Nairametrics in separate interviews, explained that there are several factors responsible for the development and agreed that some of the reasons are not fundamentally strong.

Paul Bamigbola, Chairman, Nigerian Institute of Estate Surveyors and Valuers (NIESV), Lagos Chapter, told Nairametrics that a significant factor responsible for the hike is the rising cost of building materials.

According to him, property owners now spend more to build houses, as the cost of cement, iron rods, sanitary wares and tiles, among others, have all risen significantly.

For instance, the cost of steel, which was sold at N234,000 per tonne as of March 2020, had increased to N380,000 at the end of March 2021. This represents a 62% increase within the period under review.

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Dangote Cement increased from N2,600 to N3,800 (though it is sold at N3,600 in some areas in Lagos), Lafarge Cement and BUA Cement increased from N2,400 and N2,250 to N3,600 and N3,250 respectively within the same period.

READ: How to make money in real estate

Bamigbola said, “The high cost of acquiring land, including the actual cost of building, also adds to the reasons property prices in Lagos are high.”

But when our analyst pointed out to Bamigbola that the hike also affected old houses, he said, “To also increase the rents, most of the owners of the old house renovate the houses a little before letting them out. They do that to increase the rent to about N400,000 if the owners of new houses charge N500,000.”

Another factor responsible for the hike, especially in Lagos, is the lack of formal housing. With over 3.8 million households in Lagos, up to 2.1 million households are without formal housing. This presents a supply gap of over 55%.

Chief Executive Officer, Richfield Limited, a real estate company, Samson Odegbami in a recent interview with Nairametrics said, “As typical in every market, excess demand drives up prices. This could make landlords, who frequently get requests for their available spaces, increase the prices and let out or sell the property to the highest bidder.

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READ: Where to buy Real Estate in Lagos in 2021

Estate Intel, in its report, stated that the lack of transparency between asking and achievable prices was also another factor.

It added that the multiple agents and developers involved in marketing properties typically list these properties for significantly higher amounts than what they are willing to accept.

It stated, “We expect developers or agents to aim to achieve the highest possible price, with a window for negotiation, leaving a wider than usual spread between asking and achievable prices.
A large spread between asking and achievable rent makes average market rent seem artificially high and encourages other developers to hold fast on those artificially listed prices, keeping average rents or sale prices high.”

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Bottomline

Based on the experts’ views, the rent prices could be very misleading, especially because most of the properties on the listed platforms in Nigeria are priced well above what is achievable.

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Business News

Lagos commences enforcement against building collapse, substandard materials

The state government has moved to actualize its vision of zero tolerance for building collapse.

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The Lagos State government said that it has commenced aggressive enforcement against quackery in construction to end building collapse in the state as it called for the support of building professionals.

This is as the state government has moved to actualize its vision of zero tolerance for building collapse.

This disclosure was made by the General Manager of Lagos State Materials Testing Laboratory (LSMTL), Mr Olufunsho Elulade, at its inaugural stakeholders’ conference with the theme, ‘Construction, Material Quality Control and Assurance in Lagos State, on Tuesday in Lagos.

READ: Lagos State Government orders building owners to conduct structural stability tests

According to a report from the News Agency of Nigeria (NAN), Elulade identified the use of substandard building materials and lack of adherence to quality assurance standards as the major causes of building collapse in the state.

He said the agency will immediately start standard enforcement in the building construction value chain to ensure the use of the right materials.

Elulade said, “We are, hereby, using this medium to state the terms of operations with all our stakeholders across the state; we want to partner with you to move the state forward in order to have safer Lagos for the benefit of all.’

READ: Lagos goes tough on illegal conversion of land use, enforcement begins in Ikeja GRA, Lekki, others

He emphasized the importance of doing away with the menace of quackery, substandard materials and corruption in the construction sector.

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The LSMTL boss outlined the various services offered by its laboratory which includes soil tests, water quality assessment, calibration, destructive and non-destructive tests, among others.

While launching the new logo of the agency, Elulade, pointed out that it was a strategy to eliminate quacks and private laboratories using the agency’s old logo to impersonate its operations and mislead the public.

Also, the Public Relations Officer, Nigerian Institute of Builders (NIOB), Lagos Branch, Mr Olusesanayo Philip said the institute would sustain its public sensitisation campaign adding that the institute was also partnering with LSMTL to sensitise the public on the need to engage professional builders to tame the monster of building collapse in Nigeria.

READ: FG says Lagos-Badagry Expressway not forgotten, tops Sukuk funding priority list

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What this means

The enforcement against quackery and the use of substandard materials in the construction value chain by the Lagos State government will come as a huge relief to residents and a boost to its fight against building collapse.

There have been numerous building collapse incidents in various parts of the state with attendant human casualties, due to the use of substandard materials or non-compliance with the state’s building planning laws and standards.

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