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Indigenous Contractors And The Economy



Recently, the Association of Indigenous Construction Contractors of Nigeria (AICCON) called on the federal government to prioritise the patronage of local contractors because of the possible positive ripple effect such a policy is capable of having on the economy.

In addition to the gains accruable to the nation, the policy will go a long way in building a resilient indigenous construction industry that will rival the foreign companies that have cornered almost all the jobs available.

There is no gainsaying the fact that if local contractors were adequately patronised and made to participate actively in the industry, capital flight in the sector would drop considerably and, invariably, boost the economy, increase employment opportunities, impact on Gross Domestic Product (GDP) and advance government’s investment. It is also a fact that the low level patronage local construction companies are getting is hampering the development of engineering manpower base. This undesirable situation, sustained by government preference for foreign contractors/consultants over the indigenous professionals, has made Nigeria a fertile ground for the influx of foreign low and middle manpower that are not intellectually comparable to their counterparts in the country, not to mention the fact that it is militating against the development of engineering profession and practice in Nigeria.

The request by AICCON, it must be pointed out, is outstandingly in line with the Presidential “Executive Order 5”, which supports increased patronage of local companies. This is the only way the country can attain sustainable development to match places like Singapore, China and other Asian Tiger economies.

It pertinent to stress that any nation that puts engineering and technology at the back seat will certainly be backward.  The earlier government, at all levels, realise s this all-important policy goal and pursues it vigorously, the better for the desired attainment of sustainable development in the country.

In our opinion, poor infrastructure and the deterioration in other major sectors of national life has been a source of concern to all Nigerians. Infrastructure as an output of engineering activity is crucial to the enhancement of conducive living conditions of citizens. It, therefore, means that power installations, roads, bridges, water supply schemes, communication, airports and railways, amongst others, are all key aspects that must be built to achieve economic advancement of Nigeria. This requires solid engineering input only local manpower can guarantee because no nation is ready and willing to part with her best.

A glance at the World Bank fact-sheet on sub-Saharan countries’ infrastructure indicates that the cost of redressing Africa’s infrastructure deficit is estimated at $38 billion of investment per year, and a further $37 billion per year in operations and maintenance; an overall price tag of $75 billion.

Therefore, the total required spending translates into 12 percent of Africa’s GDP while there is, currently, a funding gap of $35 billion per year. Nigeria needs about $2.4trillion within the next 30 years to bridge its infrastructure gap if she must join the league of mega economies. Currently, the size of the construction industry in Nigeria is over N1trn annually but over 75 per cent of this capital flees the country’s borders. This has often served as a major funnel for capital flight and money laundering due to the weak participation of indigenous contractors over the years.

Indeed, if there is one fundamental impediment hindering Nigeria’s continued inclusive economic growth, it is the excruciating shortage of infrastructure with its attendant impact on productivity and economic growth.

The lack of modern infrastructure is a binding constraint and major challenge to Nigeria’s economic development and constitutes a major impediment to the achievement of the SDGs and other vital objectives. So, it is the opinion of this newspaper that the government also needs to step up its policies geared towards expanding its infrastructure base by putting in place a framework to ensure proper patronage and monitoring of the local contractors.

However, the indigenous engineers and local contractors cannot exculpate themselves from blame on this sorry situation. Even the little patronage they get from government often proves their lack of capacity and competence. Most of the shoddy and abandoned projects dotting Nigeria’s landscape today are the ones handled by local contractors for the obvious reason that they emphasise the maximisation of profits over acceptable delivery of services.

It is commendable that various policies are being put in place at various levels of government to encourage the participation of indigenous manpower in construction, like the local content policy of the federal government. It is of national importance that this policy is implemented with all the required zeal. We are persuaded to argue that in the areas where they have capacity, the government should ensure that they get the right equipment since the maintenance sector is another area where massive scope exists for partnership.