FG to construct building materials hubs – Minister
The Minister of Housing and Urban Development, Ahmed Dangiwa, says the government is actively working to establish building materials manufacturing hubs.
Dangiwa explained that the initiative to establish building materials manufacturing hubs in six geopolitical zones by the Federal Government was aimed at reducing the cost of building materials and to significantly enhance housing affordability in Nigeria.
The minister made this assertion during the ministry’s organised engagement with stakeholders in the housing sector, themed ‘Development of Fiscal Incentives for Manufacturers of Local Building Materials Components in Nigeria,’ held at the Radisson Blu Hotel, Ikeja, Lagos, recently.
He said, “Local production of building materials will directly contribute to reducing the cost of construction, thereby making housing more accessible to the average Nigerian. This aligns with the Federal Government’s commitment to providing affordable housing for all. The government is actively working to establish building materials manufacturing hubs across the country. These hubs will serve as centralised locations where manufacturers can access shared infrastructure, reduce production costs, and benefit from economies of scale.
“The rationale behind this initiative is clear: by clustering manufacturers in designated hubs, we can create a synergistic environment that fosters collaboration, innovation, and efficiency. These hubs are to also provide access to modern technology, training programmes, and research and development facilities, enabling manufacturers to produce high-quality materials that meet international standards.
“Moreover, the hubs will be strategically located to ensure easy access to raw materials and distribution networks, further reducing transportation costs and enhancing competitiveness. In this regard, the suggestions yesterday that these hubs should be established in existing free trade zone areas are worthy of serious consideration. Free trade zones already offer significant advantages, such as tax incentives, reduced regulatory burdens, and access to markets. By leveraging these zones, we can accelerate the establishment of manufacturing hubs, reduce initial setup costs, and attract both local and foreign investments.”
According to Dangiwa, empowering producers of key materials like cement to scale up their operations at their existing locations is another viable option.
He said, “By providing targeted support to these producers, such as access to affordable financing, tax incentives, and infrastructure improvements, we can enable them to increase production capacity, lower costs, and meet the growing demand for building materials without the need for entirely new hubs.
“This approach not only reduces the cost and time required to deploy new hubs but also maximises the use of existing resources and infrastructure. We are taking this route because we recognise that local manufacturers of building materials face several challenges, including high production costs due to inadequate infrastructure, limited access to affordable financing, competition from imported materials, and inconsistent government policies and regulations.
“These challenges have hindered the growth of the sector and limited its contribution to the economy. That is why we are taking proactive steps to create an enabling environment for local manufacturers. Fiscal incentives are one of the most effective tools at our disposal.”
He noted that these incentives could include tax holidays or reduced tax rates for local manufacturers, customs duty waivers on the importation of machinery and raw materials, grants and subsidies to scale up production, access to affordable financing through low-interest loans, and public-private partnerships to drive innovation and growth. I am sure that more on this will be discussed at this session.
“In conclusion, the development of fiscal incentives for manufacturers of local building materials is not just a policy option; it is a necessity for the growth of our economy and the realisation of our housing goals,” Dangiwa stated.
