For developers, inflation has driven up the costs of raw materials, such as cement, paint, and cables. Cement, for instance, has doubled in price, from ₦3,300 per 50kg bag in 2021 to ₦7,000–₦7,500 today. Diesel prices have surged, affecting construction projects that rely on fuel-powered machinery. The Lagos-Ibadan Expressway project, for instance, experienced delays partly due to diesel cost increases—a challenge highlighted by the then Minister of Works and Housing, Babatunde Fashola. These rising costs have led to significant delays in project completions, as developers struggle with cost overruns and monetary constraints.

High inflation has driven up interest rates, raising financing costs and further delaying projects. The volatility in exchange rates has also contributed to the problem as some items cannot be sourced locally. With consumer spending power unable to keep pace with inflation, many developers are delaying new projects until conditions stabilize. In some cases, developers have been forced to abandon projects altogether, worsening Nigeria’s housing supply shortage.

In response, the Federation of Construction Industry (FOCI) has called on the federal government to revise contract templates and procurement guidelines to account for material cost inflation.

At UPDC, we are keenly aware of the challenges posed by the current macroeconomic environment. To cushion the effects of inflation, we’ve adopted value engineering and strategic procurement measures to cut unnecessary costs and ensure that we continue delivering value to our buyers, investors and stakeholders at large.

For expert advice on your next strategic real estate investment, portfolio management, or assistance with your upcoming project, feel free to reach out to us here.