Igbuan Okaisabor, CEO, Construction Kaiser

Igbuan Okaisabor, CEO, Construction Kaiser

Interview: Igbuan Okaisabor

What role will public works play in the construction sector in the coming year?

IGUAN OKAISABOR: The Nigerian government remains the largest client of construction companies because it undertakes the construction of many of the country’s key buildings and infrastructure, such as dams, roads, bridges, schools, hospitals, and water supply, sewerage and power systems. Furthermore, there was a rise in the government budget for the building of infrastructure in 2017, which has resulted in increased construction activity that should continue into 2018. In addition, crude oil sales – a major source of government income – have recently risen. There has also been more private sector investment through public-private partnerships, which has brought to life developments that would not have been executed otherwise.

In what ways could the participation of local construction companies be enhanced?

OKAISABOR: The government should come up with deliberate strategies to ease local companies into the construction of major projects that are under way. If domestic businesses do not have the opportunity to learn, they will never be able to develop the competence and building capacity needed to execute these projects on their own in the future.

Joint ventures and genuine partnerships should be encouraged between local firms that have a good understanding of the environment, and foreign companies that have the technology, finance and skills to complete complex and large projects.

There should be private sector involvement in educating and encouraging youths to learn to build high quality projects safely. This will help the sector adopt international best practices over the long term. Engineers should also be taught entrepreneurial skills so that they have the knowledge and confidence to set up their own construction businesses, thereby employing more Nigerians and reducing unemployment across the country. Lastly, a regulatory body should be set up, like the Nigerian Content Development and Monitoring Board in the oil industry, to protect local participation.

How is the need for mass housing in Nigeria creating opportunities in the construction sector?

OKAISABOR: According to an IMF report in 2015, Nigeria’s housing deficit was at 17m. Many people live in rented or sub-par accommodation, and we continue to have a growing population, which could mean even greater demand for housing in the future. There is a huge unmet need in this sector, and if this potential were unlocked, there would be enough projects to keep the sector vibrant.

There are several factors that have restricted the growth of the industry. Some of them include the unavailability of affordable, long-term mortgages, difficulty in enforcing contracts and foreclosures, and challenges in obtaining titled land. Another problem is the lack of adequate infrastructure, as this results in increased costs when embarking on mass housing developments.

In order to improve accessibility, how should the mortgage market be restructured?

OKAISABOR: There has been limited success in improving mortgage market accessibility so far. This is largely due to weak regulations and the limited size of mortgage institutions. The mortgage banks have to be recapitalised and mergers should be encouraged in order to increase their capacity. Additionally, it is important to address the complexity of the legal and regulatory prerequisites for obtaining a loan. The government’s “Family Home Fund” aims to provide construction finance, as well as to improve the liquidity of the mortgage banks. Hopefully, these measures will help make the market more accessible.

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Igbuan Okaisabor

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The Report: Nigeria 2017

Construction & Real Estate chapter from The Report: Nigeria 2017

Cover of The Report: Nigeria 2017

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