FACTORS AFFECTING BUILDING COST

FACTORS AFFECTING BUILDING COST

Some of the factors affecting building cost in Nigeria are identified as follows:

1. Government Policies: This is one of the most significant factors influencing the cost of building in Nigeria

The existence of several tiers of foreign exchange has contributed to the rapid devaluation of Nigeria currency, causing the exchange rate to fluctuate and at most time increased on the price of imported materials thereby contributing to the total cost of the building.

Government has build factories like cement factories, iron and steel factory as well as encourages foreign investors for the establishment of manufacturing and assembly companies of the building component in the country. These policies is aimed at making building materials available and affordable.

2. Bribery and corruption: Bribery and corruption has taken its fold in the society in such a way that money and gift presented as part of the incentive in securing a project or manipulation of product all of which reflect on the final cost of the project. It has be observed that 10% of the project sum goes to the pocket of the top functionaries in government contracts.

Also 5-10% goes to the supervising team to ensure prompt certification for payment at interim valuation period. About 45% of the present job cost of such is added to the construction work in Nigeria (Olassedebe, 1996). As a result, the contractor use a poor workmanship in execution of the work. (Ademoroti, 1988).

3. Design Method: Building cost is affected by the design or construction method. If the client desire to use pre-cast concrete instead of insitu concrete or the use of system building instead of traditional types of construction.

The choice of the pre-cast or system building in the construction makes the building cost to be on a higher side if compared to the use of in-situ or traditional types of construction of building.

4. Employment of Expatriates: Nigeria construction industry is like an international shopping centers that seemingly operates without any set of rules.

All aspect of its operation were affected by the situation apart from infiltration of the industry by quacks expatriates, consultant and contractors who dominate major project in Nigeria.

These foreigner were alleged to conspired among themselves to heavily inflate the cost of building project.

5. Increase in Fuel Price or Shortage in Supply of fuel especially petrol and diesel used in plant and vehicles on site and by the supervising team, thereby affecting the cost of hiring and maintaining plant on site. This also affects the freight charged on building materials. The over head charged will also be affected and basically it will increased the building cost.

6. Inflation: This applies to the cost of labour and material. It plays a substantial role in increasing the cost of a building in Nigeria. A very good example of inflation impacts on building cost happened early January – March 2001 where the cost of cement rose from N780.00 – N1100.00 resulting to 41% increase.