Nigeria’s construction sector has experienced a 20% surge in costs over the five-month period from December 2025 to May 2026, driven by sharp increases in building material and energy prices. This finding was disclosed in a report by Fortren & Company, authored by the firm’s Chief Executive Officer, Martin Uche.
The report attributed the cost escalation to supply chain disruptions and rising freight costs linked to the escalating Iran–Israel conflict, which have pushed up project delivery expenses across key African markets, including Nigeria. It identified escalating geopolitical tensions as a major factor, noting that disruptions to energy and freight flows through the Strait of Hormuz have significantly affected global logistics and supply chains.
Cement, steel, and finishing materials recorded the sharpest increases, prompting many contractors to shift from fixed-price contracts to indexed pricing structures. Developers are increasingly delaying projects, renegotiating agreements, or scaling back specifications as project feasibility comes under pressure. The report stated that the 20% increase reflects a broader repricing cycle across African real estate markets rather than a temporary inflationary shock.
While these contracting models may provide greater flexibility, they could also slow project delivery timelines and complicate financing arrangements. Rising construction costs are beginning to influence broader real estate pricing, with implications for rents, affordability, and investment yields across major urban markets. The Strait of Hormuz has remained effectively closed or severely restricted for most commercial shipping activities since early March 2026, following Iran’s response to US and Israeli strikes that began on February 28.
Although US officials have reported progress toward a possible arrangement that could reopen the route, full normalization has yet to occur. The continued uncertainty surrounding the Strait of Hormuz remains a major factor influencing global energy markets, freight costs, and supply chains, with direct implications for construction activity in Nigeria and other import-dependent economies.
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Caleb Obiowo, a graduate of Urban and Regional Planning from the University of Uyo, covers transport and logistics in Nigeria, along with real estate, construction, and aviation for Nairametrics.
