Diversification drive re-ignites calls for local content policy in const. industry
Ongoing Made-in-Nigeria campaign arising from the need to look inwards for economic diversification in response to the crippling impact of the economic recession has re-ignited calls for local content policy in the construction industry.
Industry operators explain that the policy, which seeks intervention from government to compel foreign civil construction firms to partner local firms, is aimed to help grow indigenous businesses in that sector and ensure profit retention as against capital flight by the foreign firms.
It is expected that local content will not only ensure increased participation of local players in the construction sector, but also provide job opportunities for indigenous workers including professionals and artisans.
“No time is better than now for the government to come up with that policy as the country struggles through the severe impact of recession,” Johnson Chukwuma, a civil engineer, says.
Chukwuma explains that the best way government could achieve result in diversifying the economy through construction is ensuring that local operators are involved, more than ever before, in construction activities leading to infrastructure development.
“When this is done, jobs will be created for a good number of citizens and for different categories of workers including engineers, carpenters, bricklayers, construction equipment operators, contractors and suppliers of construction inputs, and even food vendors.
“Given the multiplier effect of earned income, it becomes unimaginable how many households will have food put on their table and also solve other economic and social problems including owning homes as a result of this,” Chukwuma notes.
Recently, the Federal Government identified agriculture, manufacturing and construction as potential growth areas that could generate activities, create jobs and breathe life into the economy. But, for too long, the construction industry in the country has been dominated by foreign firms, making growth in the industry not only slow, but also difficult.
Operators say about 300 percent growth in the value of investment in industry is expected to happen by 2021 and have hinged this growth on the effective implementation of the Local Content Bill now at committee level in the House of Representatives.
It is also expected that by 2020, Nigeria alongside India will enjoy higher growth rates than notable nations like China, as the contribution and impact of the industry to the economy cannot be neglected having become a veritable index in employment generation for both skilled and unskilled labour in the country.
“The slow growth of the industry is as a result of non-application of local content,” Solomon Ogunbusola, former president, Federation of Construction Industries (FOCI), emphasises, pointing out that the situation is such that the industry’s contribution to Gross Domestic Product (GDP) was as low as 3.2 percent.
Bode Adediji, an ex-president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), blames the slow growth on a combination of factors, explaining that the domination of the industry by foreign firms was caused by local operators who lack foresight and ability to synergise for growth.
While other operators expect a more global integration within the industry, they too blame the slow growth in the industry on macro-economics, government spending, contracts being stalled, and security issues, all of which are affecting foreign investments, just as lack of investment also slow the growth of the industry.