Abuja: The Federation of Construction Industry (FOCI) says Nigeria’s construction sector has lost about 41,000 workers in the last two years, seeking urgent intervention to prevent further decline. FOCI President and Chairman of Council, High Chief Vincent Barrah, stated this at the federation’s 70th Annual General Meeting (AGM) in Abuja on Wednesday.
According to News Agency of Nigeria, Barrah highlighted that the construction industry, despite its importance to Nigeria’s economy, is experiencing a significant slowdown due to inadequate funding, delayed payments, and rising costs. He pointed to high interest rates, foreign exchange fluctuations, and increasing prices of construction materials as factors impacting contractors’ operations and project implementation nationwide.
Barrah noted that many FOCI members handling government projects are currently unable to work, while those operating are doing so at very low capacity. He attributed this largely to non-payment for certified jobs, indicating that the gap between annual budget provisions and actual cash releases has exacerbated contractors’ challenges.
He explained that delayed payments have led to the accumulation of certified debts, suspension of projects, reduced construction activities, and significant job losses across the country. Barrah emphasized that many infrastructure projects are awarded without multi-year funding, resulting in these financial and operational setbacks.
Barrah further stressed that contractors cannot continue working without necessary funds as infrastructure projects are capital-intensive. He noted that delays, suspensions, or abandonment of projects are not the contractors’ fault, highlighting that these issues have resulted in a substantial loss of employment, affecting around 1,000 senior staff and 40,000 junior staff workers in the reviewed period.
On contract administration, Barrah called for adherence to standard contract conditions, urging that any proposed changes involve relevant professional bodies and government institutions. He implored authorities to ensure contract prices reflect prevailing economic conditions, noting significant cost increases for inputs like cement, steel, bitumen, diesel, and equipment.
Barrah also pointed out that prolonged delays in approving contract variations could force contractors to execute projects at rates below market prices, causing financial losses. He emphasized that contract pricing should consider material costs, labor, geographical location, and soil conditions, as each project has unique requirements.
He identified delayed certification and payment as major factors affecting contractors’ liquidity, with lengthy administrative processes straining working capital. Contractors, he noted, are often forced to finance substantial project portions while awaiting payment, incurring additional costs and weakening operations.
Barrah expressed concern over high borrowing costs, particularly for indigenous construction companies seeking project financing. He stated that lending rates in the banking sector remain high, ranging from about 20 to 46 percent, complicating affordable financing for contractors.
According to him, FOCI, established in 1954, represents stakeholders in Nigeria’s construction industry and promotes industrial harmony and regulation within the sector. Barrah noted that the construction industry is Nigeria’s second-largest employer after the government, contributing significantly to GDP.
Barrah highlighted Nigeria’s infrastructure deficit as a significant opportunity for the industry, but translating increased capital budgets into completed projects requires effective funding and prioritization. He emphasized the need for payment discipline and sound contract administration to ensure timely and cost-effective project delivery.
‘We, therefore, use this medium to call on all relevant stakeholders to intervene urgently in this dire situation to save the construction industry from total collapse,’ he said.