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N500 billion debt: FOCI demands state of emergency in construction industry

By Jude Njoku

Weighed down by huge debts owed its members by the three tiers of government, the Federation of Construction Industry, FOCI, the umbrella body for about 125 major construction companies operating in Nigeria, has called on the incoming Federal government to declare a state of emergency in the construction industry.

Reconstruction of Lagos-Ibadan express way... Contractors allege non-payment for completed projects (Inset): Mr. Solomon Ogunbusola, FOCI president.
Reconstruction of Lagos-Ibadan express way… Contractors allege non-payment for completed projects (Inset): Mr. Solomon Ogunbusola, FOCI president.

President of the 61-year old pressure group, Mr Solomon Ogunbusola, a builder, was irked with the directive given to commercial banks by the Central Bank of Nigeria, CBN to publish the names of contractors indebted to them (banks).

Ogunbusola who stated that the Federal Ministry of Works alone is owing contractors over N500 billion for projects already executed and delivered, wondered why the same government which is owing them (contractors), would direct its agency, the CBN to publish their names as chronic debtors.

The FOCI President who disclosed that construction companies in Nigeria are working below 30 percent of their capacity, attributed this scenario to the inability of clients to pay for works already completed. “ The construction companies in Nigeria are working below 30 percent, not because we are interested in doing this, but we have been handicapped due to lack of payment by our clients and the major client we have today is the government (Federal, State and the local governments).

Our members are indebted to the banks. I can say authoritatively that the banks are writing and threatening some of our members, that they would publish their names that they are chronic debtors because, according to them, it is a directive from the Central Bank of Nigeria,” he fumed, wondering how the government which is owing them would direct its agency to publish their names as chronic debtors. He charged CBN to first publish the names of government ministries and parastatals indebted to FOCI members.

Ogunbusola who used the medium to announce the hosting of FOCI’s 59th Annual General Meeting, AGM and Construction Industry Exhibition in Abuja later next month, said retrenchments will continue in the sector due to the paucity of funds to pay workers. “They are owing us a lot of money, even the Federal Ministry of Works alone is owing us over N500 billion.

We have retrenched a lot of people. Until last week, we are still retrenching people and the process will continue until when we get a stable place. We are merely keeping the offices because we just want to be in existence with the hope that the new administration would be a better one for us. We cannot hide any longer. The best we can do is: We need an emergency intervention. If you like, they should declare a state of emergency in the construction industry,”he said.

Mr. Ogunbusola who is also the Managing Director of S&M Nig. Limited, said his members are afraid of speaking out for fear of being blacklisted by the government. The FOCI boss explained that most of the projects executed by FOCI members were done with funds borrowed at very high interest rates from commercial banks.

He lauded the Bureau for Public Enterprises, BPE for coming up with a database to categorize all the construction companies. The categorization, according to him, will makes it easy for the companies to know where they belong. Ogunbusola noted that some of them were not placed and asked BPE let the affected companies know their areas of deficiency to enable correct them and get placed into their own category.

On the AGM Exhibition which is billed to hold between 23 -25th of June, the FOCI President said it is a “one stop shop for both buyers and sellers of equipments to converge due to its quality and large attendance”. Some of the 125 FOCI members include Julius Berger, Reynolds Construction Company, RCC, Structec, Trevi, DTV, PW Nigeria Limited, JKN Limited, Setraco, Jagal Nigeria and G. Cappa PLC.


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