Contractors seek govt’s bailout fund for construction
TO salvage Nigeria’s construction industry, contractors under aegis of the Federation of Construction Industry (FOCI) have appealed to the Federal Government to urgently bailout the industry.
FOCI, the employer organisation for building and civil engineering contractors, sub-contractors, as well as plant and equipment suppliers in Nigeria, said the call was necessary to rescue the over-stretched construction industry.
Besides, the quick and direct intervention from the government, would enable some of its members who have not been able to their workers for several months due to huge governments’ indebtedness to meet their obligations to their workers.
According to the group, due to harsh economic effect on the sector, many players within the industry have not had it easy, thereby leading to closure of their firms.
The situation, the group added, was compounded by the over N600 billion, which both the Federal and state governments, are owing its members.
More worrisome is that, till now there is no sign of improvement as the debt profile has kept increasing.
In a statement jointly signed by the president and Director General of FOCI, Mr. Solomon Ogunbusola and Mrs. Olubunmi Adekoje, the state of the construction industry was disturbing, which demands urgent attention.
They added that, reliance on budgetary allocation alone to meet the industry financial needs would not match the present reality, hence, the need for direct intervention to solve the debt owed the construction industry.
The statement reads in parts: “FOCI expected that by now things would have improved; however, it is disheartening to note that the debt profile has continued to rise since all tiers of government have been unable to pay their debts.
“FOCI fears that if the Government has to rely on only budgetary allocation without direct intervention into the debt owed the construction industry, then the construction industry in Nigeria could be moving towards a total collapse.”
It added that: “Most projects were awarded when the exchange rate was $1 to N165.00. However, the current exchange rate of $1 to about N400,00 has rendered the projects non-viable and totally unprofitable.
“The depreciation of the naira against the dollar has led to serious difficulties in procurement of machinery, spare parts and payment of experts for specialized assignments.
“Construction companies have been forced to leave construction sites due to lack of funds. This leads to challenges in payment of workers’ salaries and parking of capital intensive construction equipment. The parked construction equipment are depreciating faster due to non-usage and are at a risk of being rendered obsolete.
“To compound the above challenges, workers in the industry are agitating for upward review of the conditions of service. This is despite the fact that about 75 percent of the workers have been laid off while the remaining 25 percent are being maintained on high interest loans rate from the commercial banks”, the group added.
These challenges steering the industry in the face, without any soon solution, have impacted and still hampering the construction sector, described as the second best employer of labour ranking after the Federal Government.
Convinced of possible solution, FOCI “Appeals to Government for an urgent bail-out and quick intervention so that workers who have not received salaries for some months can be paid and members can return to sites to resume their operations before the fast approaching rainy season.”