The Federal Government is exploring the establishment of manufacturing hubs for local building materials within free trade zones nationwide.
This initiative seeks to harness the benefits of these zones—such as tax incentives, streamlined regulations, and market access—to enhance local production, reduce construction costs, and improve housing affordability.
The Minister of Housing and Urban Development, Musa Dangiwa, revealed this during his keynote address at the Stakeholder Forum on Developing Fiscal Incentives for Manufacturers of Local Building Materials in Nigeria.
He noted that the proposal to utilize free trade zones was raised during the forum. This was stated in a press release on the ministry’s website on Thursday.
“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 is 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,” Dangiwa stated.
He further explained that building materials make up around 50% to 70% of total construction costs, with cement alone contributing about 15% to 20%.
He added that other materials, including steel, roofing, doors, windows, electrical, and plumbing components, also significantly impact overall construction costs.
Dangiwa stated that another strategy being considered, as suggested during the forum, is supporting key material producers, such as cement manufacturers, to expand within their existing sites.
By offering affordable financing, tax incentives, and infrastructure upgrades, the government aims to help these producers increase capacity, lower costs, and meet rising demand without the need for new hubs.
He explained that this strategy optimizes existing resources, reduces costs and timelines, and tackles key challenges faced by local manufacturers, including high production costs, limited financing, import competition, and policy inconsistencies.
Dangiwa added that the plan to establish building materials hubs nationwide aligns with previous efforts to promote local manufacturing, such as the creation of the Building Materials Producers Association of Nigeria in 2004.
