Nigeria's construction sector has seen a significant cost escalation, with prices rising by 20% over a five-month period from December 2025 to May 2026. This surge is primarily driven by escalating prices of building materials and energy.

A report by Fortren & Company, authored by CEO Martin Uche, identified supply chain disruptions and increased freight costs, exacerbated by the Iran-Israel conflict, as key factors. These global issues have impacted project delivery costs across several African markets, including Nigeria.

The report highlighted that the 20% rise in construction costs reflects a broader repricing cycle in African real estate markets, rather than a short-term inflationary blip. Elevated energy prices and disrupted global freight routes have structurally increased the baseline cost of development activities.

Nigeria's specific vulnerability stems from its reliance on imported cement, steel, and finishing materials, as well as the widespread use of diesel-powered construction equipment. These factors have contributed to sharp increases in the cost of these essential components.

In response to these rising costs, many contractors are shifting from fixed-price contracts to indexed pricing structures. Furthermore, developers are increasingly opting to delay projects, renegotiate existing agreements, or reduce project specifications as the economic feasibility of new developments comes under pressure.