By Jude Njoku
The inability of the Government and multi-national companies to settle a debt of over N100 billion owed contractors may cripple activities in the nation’s construction sector, the Federation of Construction Industry (FOCI) has warned.
The organisation which represents about 91 construction companies operating in the country, stated that the current failure by governments and multi-national organisations to fund ongoing capital projects may lead to the loss of over 100,000 jobs in the industry which is seen as the highest employer of labour and barometer for measuring a country’s gross domestic product (GDP).
President of FOCI, Engr Mobolaji Williams explained that between November 2010 and February this year, over 60,000 employees of construction companies were retrenched by their employers.
He explained that in a situation where every workers caters directly or indirectly for four persons, up to 400,000 Nigerians may be affected by the sacking of 100,000 construction workers.
The FOCI President said the retrenchment cuts across all category of workforce.
“Between November 2010 and February 2011, more than 60,000 were sent home due to the closure of the sites they were deployed. These sites are being closed as a result of the failure of the governments to release the cash backing for these capital projects in line with the agreed completion stages of the programme for their execution or approved certificates,” he said.
He regretted that this scenario has arisen during the dry season when construction companies “ought to be fully stretched to cover as much ground as possible before the beginning of the rainy season when construction activities normally slow down due to inclement weather”.
Engr Williams explained that construction companies are getting very worried because of the piling debts, some of which date back to the middle of 2010, even before the Federal Government reviewed downwards by 40 percent.
He appealed to the Federal Government to review its position on release of funds for payment of these debts and save both the employers and workers in the construction industry from looming disaster.
“It is important to the economy that accumulated internal debts be cleared to save the creditors from going into bankruptcy. The multi-national and local manufacturing companies who are hiding under this terrain of government should beware,” he warned.
Vanguard Homes & Property recalls that Works Minister, Senator Sanusi Daggash had in February acknowledged that the Federal government is owing contractors over N60 billion for roads projects already completed. The Minister told the Senate Committee on Works that the huge debt portfolio had slowed down activities in the construction industry.