EFFECT OF EXCHANGE RATE VOLATILITY ON MATERIAL PRICE MANAGEMENT OF SELECTED BUILDING CONSTRUCTION MATERIALS IN NORTH CENTRAL NIGERIA PROJECTS

Abstract

Exchange rate volatility is one of the macroeconomic variables that affect construction material prices in the country especially in the last 10 years. This study examined the trend of exchange rate volatility on the construction materials prices between 2011 – 2020 in the north central geo-political zone with quantitative data on exchange rate obtained from the Central Bank of Nigeria Statistical Bulletins (CBN) whereas cement, block, tile and reinforcement prices were obtained via market survey. Data analysis using the Ordinary Least Square (OLS) technique revealed p-values of <2.2e-16, <2.2e-16, <2e-16 and <2.2e-16 for cement, block, tile and reinforcement respectively, these implies that exchange rate volatility was statistically significant in forecasting the trend of the selected construction material prices. The construction materials used for this study were sourced off-shore. The study recommends that formulation and implementation of necessary fiscal policies by diversification of the revenue base will go a long way in stabilizing Nigeria’s balance of payment position and lessen her dependence on foreign building materials