Construction industry’s 300% investment value growth hinged on Local Content Act

The local construction industry in Nigeria has suffered slow growth as a result of the non-application of local content in the industry. According to Solomon Ogunbusola, president, Federation of Construction Industries (FOCI), the situation is such that the industry’s contribution to Gross Domestic Product (GDP) is as low as 3.2 percent.

Bode Adediji, former president of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), who blamed the slow growth on a combination of factors, explained that

the domination of the industry by foreign firms was caused by local operators who lack foresight and ability to synergise for growth.

Michael Beylouny, managing director, Lambert Electomec, who corroborated Adediji, said, however, that “in future, we expect more global integration within the construction industry”.

Beylouny said the slow growth in the industry was caused by macro-economics, government spending, oil and gas contracts being stalled, and security issues, adding that all these were affecting foreign investments, just as lack of vision, medium or long-term investment also slowed the growth of the industry.

Ogunbusola of FOCI contended that the state of the nation’s economy had somewhat overstretched his members as they tasked themselves to meet up with contracts awarded to them at various levels.

He added that these members were operating under serious constraints including high indebtedness by different governments, while expressing hope that the expected growth in the industry would be driven by the Federal Government’s transformation agenda which, he noted, had seen infrastructural development in various parts of the country.

“The growth in our members’ investment value will be driven by the Federal Government’s transformation agenda. The government is doing a lot of transformation and in the construction industry, we are not just talking about road construction, we are also talking about transformation in rail and air transport,” the FOCI president said.

Ogunbusola said that no government had invested more in infrastructure provision, especially roads, than the present government under President Goodluck Jonathan.

“If you go to the far north, you will see massive investment in roads and rail infrastructure. In the construction sector, most of the roads in the eastern and northern parts of the country are being dualised. As all these are going on, some of our 125 member-industries, especially the big ones like Julius Berger, Dantata, PW, etc, are getting involved and if it goes on like that, I am sure by 2021, their investment value will triple,” he said.

BusinessDay