In order to achieve a more diversified economy and sustained growth for Nigeria’s economy, the country needs to improve its performance in other non-oil sectors. One such industries that holds huge potentials for the Nigerian economy is the construction industry. The construction industry is very important because other sectors of the economy rely on the construction industry in one way or the other. However, in Nigeria, the contribution of the construction industry to the country’s GDP and employment is very low. The construction industry is largely underdeveloped with huge potentials untapped. This article discusses the problems of the construction industry in Nigeria.
Problems Facing the Construction Industry in Nigeria
Inadequate or lack of project planning
It is a very common occurrence to see projects drag way beyond their estimated periods in Nigeria. Sometimes, this is due to faults in project management where clients and contractors continue to put in changes, additional features or functions after a project has begun. Delay in project execution happens because of the following reasons:
Vagueness and lack of detailed explanation in documents
Lack of proper communication management between clients and contractor
Clients trying to get extra work done on a cheap amount
Designing and starting a project before proper project analysis is carried out: Proper project analysis allows the contractor and client to be fully aware of the requirements for the project and to foresee whatever issues can come during the course of the project. Many times, those who design a project have unrealistic views and impossible time frames because there was no project analysis before the design was done.
Lack of Communication
Delay in the execution of projects and low-quality projects is also due to communication problems along the way.
Inadequate funding
Construction works are capital intensive. The cost of procuring equipment to be used for construction work could cost millions of naira. Other expenses include payment of salaries etc. Hence, contractors are then faced with issues of lack of finances. Most contractors who are just starting out are often not patronized by the major clientele because of the fear of losing money. Budding contractors are then under the pressure to source for funds to execute projects. Many are also not able to secure loans from banks because Nigerian banks do not want to issue out loans to contractors that are just starting out.
Kickbacks
In many cases, contractors have to pay huge amounts of money to secure a contract. Kickbacks are money paid to someone or a group of persons who are involved in one way in obtaining a contract for a project. Most times, the kickbacks are so enormous that the contractors themselves rarely make up to the gain they payout.
Poor quality control
A challenge in Nigeria’s construction industry is poor quality of work. Often times, projects embarked on are often poorly executed. This can be as a result of the following reasons:
Greed
Often times, contractors want to make much profit for themselves at the expense of good quality. This is why many clients and organizations refuse to pay contractors until the project is completed.
Inadequate project funding
Aside from greed on the part of contractors, another factor that can lead to poor quality of work in construction projects is inadequate project funding. Often times, contractors are not given the funds needed to execute projects properly and they then use sub-standard materials which result in the poor quality of projects.
Negligence on the part of contractors
Many contractors do not pay attention to the specifications of clients which then leads to poorly executed projects. Lack of supervision during the process of project execution also leads to poor quality of work.
Political instability and corruption
Abandoned projects is another common challenge facing Nigeria’s construction industry. Many government projects are seldom completed. This is due to a lack of political will as well as corruption.
The government’s abandoned projects are as a result of the instability of the government in Nigeria. When a new government comes into power, oftentimes, projects that were begun by the previous administration are abandoned and another one is started. This is how many major projects begun have been abandoned and there are many abandoned projects in Nigeria.
Corruption is another reason for abandoned projects in Nigeria. Government projects are usually awarded to government officials, family and friends who most often do not have any technical knowledge or skills needed to run the projects.
It has once been claimed that over N5 trillion government projects have been abandoned across Nigeria. Other forms of corruption include embezzlement of funds allocated to projects. Often times, public funds are stolen by contractors and government officials who are involved in approving or awarding the project for personal use.
Lack of Skilled Workers
There is a dearth of skilled workers to meet with the demands in Nigeria’s construction industry. Many in the millennial generation are pushed towards white-collar jobs, and not vocational trades. Many do not pursue careers in sectors such as construction
Difficulties in the procurement of equipment
Many contractors find it difficult to obtain plants and equipment needed for construction work. The unstable prices of materials used in the construction industry also add up the challenges in the industry.
Lack of training and development institutes
In addition to the lack of skilled manpower is the lack of training and development institutes. There is a need for the establishment of training and developments that can teach and improve the skills of construction workers.
Unreliable Subcontractors
Many contractors who have good intentions and want to deliver standard projects have problems finding trustworthy subcontractors. Many contractors have not created the right connections and are not able to ask around for reliable materials suppliers and vendors that will help them deliver a good job. Many who claim to be contractors in the construction industry lack licenses and are not professionals. This negatively affects the credibility of the construction industry.
Fiscal challenges
The construction industry requires high costs of operation which then results in low profits for the contractors. There is also the additional problem of tax laws which are not favourable to contractors and make many of them to run at a loss when doing business.
Great!