Government tasked on development of local construction industry to boost economy

By Olivia Nnorom

As Nigeria, Africa’s largest economy, continues to seek ways to diversify its economy away from over-dependence on oil, an expert in the real estate sector has advised the government to look towards growing the local construction industry.

Olufemi Adedamola Oyedele, a registered estate surveyor and valuer and an experienced construction project manager, said the development of the domestic construction industry in developing countries is a prerequisite for the rapid development of such countries.

Writing in a recent article, Oyedele stressed the importance of construction companies, saying they develop physical infrastructure which are basic to business, commerce and security of lives and property. He further argued that “buildings, telecommunication masts, warehouses, roads, dams, irrigation works, schools, hospitals, factories, and other construction works are the physical bases on which development drives and improved living standards are established”.

Nigeria’s local construction industry, if properly developed, could be used to kick-start the economic development of the country, Oyedele said in the article, “Anchoring Nigeria’s economic growth and development on the construction industry”.

“The Nigeria construction industry is expected to grow by 3.2 percent between 2021 and 2025. It employs about 10 million workers annually and has a total market size of $998 million as of 2021. It has the propensity to be used for kick-starting the economic development of Nigeria as it can be used to provide employment, produce capital products and bridge the wide infrastructure gap,” he said.

On why improving construction capacity and capability is important to most developing countries, Oyedele, who is the CEO of Fame Oyster & Co. Nigeria, pointed out, among other reasons, the need to maintain the extensive basic infrastructure built up at high cost in earlier years, which small firms are more suited to undertake, the need to improve the efficiency, aesthetic, and quality of construction and maintenance works in many developing countries, and the growing recognition that construction can be a more important generator of jobs and create avenues for human capacity development and entrepreneurship development.

He said about one-half of the gross, fixed capital structure in the budget of most developed nations generally takes the form of construction output, and various reports have also shown that developing countries which have been able to develop and rely on their local construction companies are reducing poverty in their countries.

He, therefore, urged the Nigerian government to pay more attention to indigenous construction firms as a way of jumpstarting the economy crumbling under the weight of high unemployment rate, revenue shortfall, and rising inflation.

“The total infrastructure stock in Nigeria amounts to 30 percent of gross domestic product (GDP), according to the World Economic Forum (WEF). This falls short of the 70 percent international benchmark. This presents a great opportunity and a base for the federal government to anchor the nation’s economic developmental programmes,” he said.