FG’s failure to encourage local content in construction industry slowing growth
The failure of the Federal Government of Nigeria to encourage local content in the country’s construction industry is slowing its growth, industry operators have said.
The industry, which is a major employer of labour, has been in slow growth (and currently in recession) due to a combination of factors which the local operators blame mainly on the domination of the industry by foreign firms.
Experts argue, however, that the slow growth in the industry stems from lack of capacity and confidence in local operators. They also blame the situation on the inability of the local operators to synergise for growth.
Macro-economics, poor government spending, oil & gas contracts being stalled, and security issues, which significantly affect foreign investments, have also been adduced as reasons for the industry’s slow growth.
But the operators think differently. They insist that if the Local Content Act is properly and comprehensively implemented, it will drive growth in their industry just as the Act has made it easier and encouraged local industrialization in the oil & gas sector of the economy.
“We have built all the capacity, acquired the relevant knowledge and also garnered the requisite experience and expertise to handle any of the big ticket jobs which are given away to foreigners”, said Igbuan Okaisabor, vice chairman/CEO, Construction Kaiser, who spoke to journalists as part of activities marking the 25th anniversary of the company.
From a very humble beginning as a 5-man organization carrying out minor renovation works, Construction Kaiser has grown phenomenally to become a foremost and leading indigenous construction firm, delivering value through quality products and services.
Across its three main branches in Abuja, Lagos and Port Harcourt, the company maintains 220 staff comprising core construction professionals and support staff.
“Since 1993 when we started out, we have been at the forefront of providing world class construction services in Nigeria. We are a wholly indigenous company and have successfully maintained global standards while being committed to developing local talent, empowering Nigerians and building a sustainable future”, Okaisabor said.
“However, with all that we are doing, we are not getting support from the government. We want the government to help us to grow this industry by encouraging local content. In our 25 years of operation, it was only last year that we got government contract, for the first time, from Lagos State government, meaning that in 24 years, we had been dealing with only the private sector”, he lamented.
Besides local content, Okaisabor said that industry operators also needed incentives like tax holiday or special construction tax from the government, pointing out that 5 percent withholding tax which construction firms pay to the government was as punitive as it was insensitive because “it tends to show that our margins are in double digits whereas they are not”.
As part of efforts at building capacity in the industry, empowering the youth and growing the industry generally, Construction Kaiser uses its affiliate companies, especially the M & E Kaiser Limited (Mechanical, Electrical and Plumbing Installation Works) and KaiserLite, to drive growth initiatives.
The company has also formed alliances and entered into partnerships with Lagos State government, University of Lagos, Peri Formwork and Lafarge Africa, all in the effort to grow the industry and also to ensure quality service delivery.
Beyond its industrial, commercial and residential services offering, the company, two years ago, created the Kaiser Foundation for Social Development (KFSD) which, the CEO explained, was aimed to spearhead change and strengthen the indigenous construction industry.
Some of the KFSD schemes are STEM Construction Summer Camp; Mentorship Scheme; Soft Skills Undergraduate Training; Graduate Entrepreneurship Scheme (GES); Artisan Training Programme (ATP); Graduate Scholarship Scheme and Research Collaboration.
The youth mentoring programme, particularly, is strategic and futuristic as it is designed to empower youths in all things construction. It provides a platform for the STEM Construction Summer Camp Alumni (mentees) to work during holidays, together with more experienced people (mentors) on live training sites. The mentors offer one-on-one mentoring sessions, site training and support on career guidance in construction, engineering and work-life skills.
CHUKA UROKO