SMEs construction firms in Nigeria, play pivotal role in economic growth and job creation says expert

A recent study by Adegoke reveals that small- and medium-scale construction firms (SMEs) face significant obstacles that affect their operational efficiency and project performance.

The research, conducted as part of an in-depth investigation into the sector, sheds light on the barriers hampering SME success and suggests ways to improve performance.

In the study, Adegoke examined various attributes of construction SMEs, including access to finance, financial management practices, infrastructure, and regulatory issues, and their effect on project outcomes.

Among the critical findings was the challenge of accessing credit, with many firms lacking sufficient funds to sustain projects and meet operational demands.

“Financial management skills are crucial for these firms, yet many struggle with poor financial resources, impacting their ability to perform,” Adegoke noted, depicting the need for improved financial practices within the sector.

The study highlighted the centrality of client satisfaction, quality of work, and budget adherence as essential factors in determining project success. Adegoke found that these performance indicators were significantly influenced by the SMEs’ internal characteristics, such as resource availability and management capacity.

“A strong correlation exists between financial stability, management practices, and successful project completion,” the study stated, pointing to a pressing need for capacity-building initiatives.

Further, the study identified weak links between various sectors of the construction firms, including managerial skills, infrastructure issues, and inconsistent government policies.

These factors collectively hinder SME growth and the sector’s contribution to Nigeria’s development goals.

“The construction sector contributes immensely to the nation’s economy, yet without streamlined policies and infrastructure improvements, growth will be stifled,” the report emphasized, calling for policy reforms to support SME advancement.

The study proposes that government and policymakers establish targeted measures to enhance credit access, promote training for financial management, and create a conducive environment for SMEs to thrive.

“The success of construction SMEs is vital to Nigeria’s industrial development, and fostering these improvements could yield substantial economic benefits,” Adegoke concluded.

This study serves as a call to action for stakeholders in Nigeria’s construction sector to address the unique challenges facing SMEs. By implementing the recommended changes, these firms can better contribute to economic stability, job creation, and infrastructural growth in the region.”