Road Construction Stalls as Forex Fluctuations Drive 150% Increase in Bitumen Costs

Many road construction projects in Nigeria are facing delays or have come to a halt, largely due to the sharp rise in bitumen prices spurred by foreign exchange (forex) instability. This situation has forced authorities to reconsider and adjust funding plans for these projects, with some timelines pushed back. Bitumen, a key ingredient in asphalt, has seen a 150% price increase over several months.

findings reveal that the price for 20 tonnes of bitumen, which was N854,375 in the recent past, has now surged past N2 million. Contractors also face challenges from fluctuating exchange rates and rising prices of other essentials, such as cement, diesel, granite, and crushed stones. As a result, some contractors have abandoned sites, while others are negotiating with clients to adjust contracts in line with the new material costs.

A source within Lagos Public Works reported that the cost of a tonne of asphalt rose from N70,000 to N155,000 over several months. The source outlined the steady price increases for 20 tonnes of bitumen, which climbed from N854,375 to over N2 million, reflecting ongoing inflation and a volatile foreign exchange environment.

Several issues, including inflation, fuel subsidy removal, government budget constraints, and dependence on imports, have been cited as contributors to the rising costs of bitumen and construction materials. In response, the Minister of Works, David Umahi, cautioned contractors working on federal road projects that they would not be compensated for delays resulting from their own setbacks. He reinforced the government’s stance on using either asphalt or concrete, depending on specific criteria, for constructing federal roads.

Meanwhile, Saidu Hassan, the chairman of the Nigerian Institution of Highway and Transportation Engineers (NIHTE), emphasized that the surge in bitumen prices would inevitably drive up road construction costs. He urged the government, as a major bitumen consumer, to step in and help stabilize the supply of this material to ensure the continuation of road projects nationwide.

Vincent Barrah, president of the Federation of Construction Industry (FOCI), echoed these concerns, noting that relentless inflation in construction material costs—particularly bitumen, cement, steel, and diesel—has intensified financial pressures on the industry, endangering the viability of numerous projects and affecting countless jobs. Barrah stressed that the skyrocketing price of diesel, essential for operating construction equipment, has only worsened the already heavy financial load on construction firms.