For the construction sector to regain its past glory and contribute meaningfully to the national economy, the government must urgently put in place intervention programmes to contain problems including low capacity, shortage of capital, poor organisation as well as management and policy instability in the sector.
These were some of the submissions of the guest speaker, Mr. Abiodun Kehinde Ahmadu, at the “2010 Business Luncheon/Awards organised by the Ikeja branch of the Nigerian Society of Engineers (NSE), in Lagos, last Tuesday.
Ahmadu said the construction sector should be viewed by policy makers as an endangered sector and, as such, aggressive policies must be pursued by the government to support and enhance its capacity.
He mentioned some of the challenges confronting the construction sector to include policy inconsistency of the government, shortage of construction inputs, construction delays, and political instability among others.
His words: “The unwarranted policy neglect of the construction sector is a major challenge that needs to be addressed urgently. Besides, the negative impact of policy inconsistency on the sector, it would seem that it is a deliberate act on the part of policy makers not to be supportive in terms of aiding the growth of construction companies.
“The current shortage of construction inputs means that the execution of many projects experience unnecessary delays. Even when supplies are available, prices have been much higher than anticipated. The construction sector experiences rapid inflation in the prices of building materials and this problem affects proper cost planning.
“For quite a long time now, local cement production has fallen behind demand, leading government, on haphazard basis, to lift import bans. Thus the gap between consumption and domestic production has always been bridged by importation and the result of the shortfall in supply in the face of increasing demand is that the price of cement has increased steeply in recent years.
“Another major challenge is the issue of construction delays arising from delayed/non-payment, design problem, legal issues, political factors etc. The consequences of construction delays on the economy are fatal. Most times, it leads to project abandonment and excessive cost over-runs.
“Political instability impacts negatively on the construction sector. During periods of political instability, not only in Nigeria but the world over, construction activities go into a lull.”
X-raying some of the policies, he explained that the peculiar problems of the indigenous construction firms should be addressed and an enduring package designed for them adding that policy makers need to consider innovative programmes that facilitate access to financial markets for the small and medium-size firms which dominate the sector.
Apart from reducing construction costs through the introduction of new policies and measures, he also enjoined the government to be supportive through innovative tax policy on building materials and ensuring an adequate supply of building materials at reasonable cost as well as increasing local production of cement and other inputs.
Other areas he took the government up on include strict enforcement of building/construction regulations, establishment of Local Content Act, giving the machine tools industry a boost, establishment of Construction Industry Fund to the registered indigenous construction firms to access loan capital at subsidised rates, overhauling of manpower training programme and boosting cement production among others.
His words: “On strict enforcement of building/construction regulations, standards and controls, it is appaling that nothing has been put in place to ensure compliance with available standards and this indeed had contributed not only to the collapsed building syndrome that we have been experiencing in Lagos and other parts of Nigeria but also to the unwholesome and shoddy works all over the place. So, I will like to charge the government to brace up to its responsibility in this regard.
“Concerning the recent Local Content Act which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards I think the same should be replicated with appropriate modifications in the construction sector. It is incontrovertible that focusing on the promotion of value addition in Nigeria through intensive utilisation of human resources, local capacity and raw materials, products and services would be beneficial to the country. One advantage of this proposal is that it would increase indigenous participation in the economy.
“As for the construction industry there is no denying the fact that it has its own “internal” infrastructural needs. So, the government should give the machine tools industry a boost as we need several of such factories like the one at Osogbo, where lathes are made and moulds are fabricated. This conserves foreign exchange that would have been committed to the importation of plants, instruments and equipment.
He said further: “The training programme should be reviewed and overhauled. The faculties of engineering have so far been largely involved in the development of professional manpower required in the construction industry. There is a need to train more technical staff particularly for supervisory duties.
“Furthermore, reliance on the formal educational system for the supply of relevant skill requirements is likely to prolong the time needed to supply requisite skills. It is, therefore, essential that greater emphasis should be given to non-formal education as a way of turning out products with requisite skills in time.”
While noting that the construction sector witnessed growth in the last few years despite the global economic downturn, he, however, blamed the present stunt growth on policy neglect by the government.
He said: “The construction sector witnessed double digit growth rates between 2004 to 2008. Unwarranted policy neglect of the construction sector is a major challenge that needs to be addressed urgently.”
He also challenged engineers on continuous professional training to update the knowledge of the engineers and raise the level of professionalism in the industry
These were some of the submissions of the guest speaker, Mr. Abiodun Kehinde Ahmadu, at the “2010 Business Luncheon/Awards organised by the Ikeja branch of the Nigerian Society of Engineers (NSE), in Lagos, last Tuesday.
Ahmadu said the construction sector should be viewed by policy makers as an endangered sector and, as such, aggressive policies must be pursued by the government to support and enhance its capacity.
He mentioned some of the challenges confronting the construction sector to include policy inconsistency of the government, shortage of construction inputs, construction delays, and political instability among others.
His words: “The unwarranted policy neglect of the construction sector is a major challenge that needs to be addressed urgently. Besides, the negative impact of policy inconsistency on the sector, it would seem that it is a deliberate act on the part of policy makers not to be supportive in terms of aiding the growth of construction companies.
“The current shortage of construction inputs means that the execution of many projects experience unnecessary delays. Even when supplies are available, prices have been much higher than anticipated. The construction sector experiences rapid inflation in the prices of building materials and this problem affects proper cost planning.
“For quite a long time now, local cement production has fallen behind demand, leading government, on haphazard basis, to lift import bans. Thus the gap between consumption and domestic production has always been bridged by importation and the result of the shortfall in supply in the face of increasing demand is that the price of cement has increased steeply in recent years.
“Another major challenge is the issue of construction delays arising from delayed/non-payment, design problem, legal issues, political factors etc. The consequences of construction delays on the economy are fatal. Most times, it leads to project abandonment and excessive cost over-runs.
“Political instability impacts negatively on the construction sector. During periods of political instability, not only in Nigeria but the world over, construction activities go into a lull.”
X-raying some of the policies, he explained that the peculiar problems of the indigenous construction firms should be addressed and an enduring package designed for them adding that policy makers need to consider innovative programmes that facilitate access to financial markets for the small and medium-size firms which dominate the sector.
Apart from reducing construction costs through the introduction of new policies and measures, he also enjoined the government to be supportive through innovative tax policy on building materials and ensuring an adequate supply of building materials at reasonable cost as well as increasing local production of cement and other inputs.
Other areas he took the government up on include strict enforcement of building/construction regulations, establishment of Local Content Act, giving the machine tools industry a boost, establishment of Construction Industry Fund to the registered indigenous construction firms to access loan capital at subsidised rates, overhauling of manpower training programme and boosting cement production among others.
His words: “On strict enforcement of building/construction regulations, standards and controls, it is appaling that nothing has been put in place to ensure compliance with available standards and this indeed had contributed not only to the collapsed building syndrome that we have been experiencing in Lagos and other parts of Nigeria but also to the unwholesome and shoddy works all over the place. So, I will like to charge the government to brace up to its responsibility in this regard.
“Concerning the recent Local Content Act which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards I think the same should be replicated with appropriate modifications in the construction sector. It is incontrovertible that focusing on the promotion of value addition in Nigeria through intensive utilisation of human resources, local capacity and raw materials, products and services would be beneficial to the country. One advantage of this proposal is that it would increase indigenous participation in the economy.
“As for the construction industry there is no denying the fact that it has its own “internal” infrastructural needs. So, the government should give the machine tools industry a boost as we need several of such factories like the one at Osogbo, where lathes are made and moulds are fabricated. This conserves foreign exchange that would have been committed to the importation of plants, instruments and equipment.
He said further: “The training programme should be reviewed and overhauled. The faculties of engineering have so far been largely involved in the development of professional manpower required in the construction industry. There is a need to train more technical staff particularly for supervisory duties.
“Furthermore, reliance on the formal educational system for the supply of relevant skill requirements is likely to prolong the time needed to supply requisite skills. It is, therefore, essential that greater emphasis should be given to non-formal education as a way of turning out products with requisite skills in time.”
While noting that the construction sector witnessed growth in the last few years despite the global economic downturn, he, however, blamed the present stunt growth on policy neglect by the government.
He said: “The construction sector witnessed double digit growth rates between 2004 to 2008. Unwarranted policy neglect of the construction sector is a major challenge that needs to be addressed urgently.”
He also challenged engineers on continuous professional training to update the knowledge of the engineers and raise the level of professionalism in the industry
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