The Federation of Building Industry (FOCI), which represents key stakeholders in the construction industry, has lamented the rising cost of diesel and power, as well as taxation, adding that it’s destroying the industry.
According to the Federation made up of contractors and consultants, the situation is further compounded by the variation of prices (VOPs) in ongoing projects, which is pegged at five per cent. The band, they said, is unrealistic in light of the current inflation rate.
They warned that construction companies would be compelled to lay off workers, thereby worsening the country’s unemployment problem.
Mr. Olayemi Shonubi, President of the Nigerian Institute of Quantity Surveyors (NIQS), spoke at the Construction Industry Business Roundtable on Appropriation Act 2022 in Abuja, calling for immediate action to save the situation.
He pointed out that the building industry employs the most people and that if any construction company went out of business, many people would be displaced.
He said: ” The purpose of this meeting is to identify challenges facing the sector and find ways to engage the Federal government to get the problems solved. We also want to engage the National Assembly on the issue of taxation so that in the drafting of the 2023 Finance Act, they would consider the sector.
“The way the taxation system has been structured, you find out that the players pay more than what is stipulated. Up to about early this year, I used to buy diesel at about N400 per litre, but now it is over N700 and this additional cost mean that your profit has been reduced…
“Nigeria has been losing about 90 per cent of revenue that is supposed to form a cash backing for the budget. If we are not able to stem the loss in oil production that will affect the cash that will be available to finance the budget. We have in the past one month had challenges with power, and without power, there will be no production.
“If the government is able to secure funding for the budget, it will have an influence on the construction industry and other industries.” The environment must be supportive to private investment in the construction sector in terms of taxation and credit access.”
Nasiru Dantata, the President of FOCI, also spoke, saying the recent inflationary trend has become a major source of concern for members, noting that the cost of essential materials increased by several points between January and March 2022, compared to the beginning of the year.