THE CHALLENGES OF INDIGENOUS BUILDING CONSTRUCTION FIRMS IN NIGERIA

ABSTRACT

This study was carried out to examine the challenges of indigenous building construction firms in Nigeria: a case study of Kaduna state. Specifically, the study was aimed at determining the effects of government policies and procedures on indigenous; find out the effects of poor financial structure on the indigenous building construction firm; and suggest was of solving the problem facing the indigenous construction firm. The study employed the survey descriptive research design. A total of 133 responses were validated from the survey. From the responses obtained and analysed, the findings revealed that government policies and procedures on indigenous building construction firms affect Building firms positively. Furthermore, there is a strong relationship between financial base and the challenges faced by indigenous building construction firms. The study therefore recommend a new innovation in the Government decision to participate in the construction industry by forming Joint construction companies with some expatriate firms. The original intention which presumably is to try to reduce cost, is a good one.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

According to business dictionary, an online dictionary, “the construction industry is that sector of the national economic engaged in preparation of land and construction, alternation and repair of building, structures and other real properties.

The industry is engaged in many types of building and civil engineering jobs. These include jobs in carpentry, road construction, bridge development and home design. The industry occupies a very important position in the whole world because it is responsible for creating infrastructures for cities, towns, and countries. Oyefeko (1991) as cited in Building construction industry …(2014). National housing Policy (NHP 2006) as in Building construction industry (2014) also confirmed this assertion when it revealed that the industry  has an output of 11% Gross domestic product (GDP) and employs 3% of employment nationwide.

Construction industry achieves its aims by combining land other factors of production including variety of raw materials and semi-processed components. This process of resource combination involves all usual elements and functions associated with production of commodity. Most times, because of some challenges facing this sector of business management, capital funds are required based on long-term source of finance to purchase materials coordinate and organize the factors of production. Detailed design of the product must be carried out and all these need to the financed. These therefore constitute challenges, Many indigenous building construction firms especially those ones who have inadequate financial base grapple with.

Further aggravation to the problems of the indigenous firms is seen in the government award of contracts to foreign and big time contractors only and leaving no room for the participating of the indigenous contractors to national development. In support of this assertion, Enwegbara (2012) sees the Nigeria’s construction industry as remaining at a cross road because government policies all these years have favoured awarding construction contracts to foreign contractors instead of their national counterparts. The reason explained above makes it obviously difficult for the indigenous firms to be reasonably established in the industry. The situation thus spells doom for the national economy because if the indigenous building contractors are forced out of business dues to the challenges, their death from the industry becomes imminent.

1.2     STATEMENT OF THE PROBLEM

The rate of influx of foreign construction firms in Nigeria and Government’s continued patronage of them, when critically analysed does not communicate any good news to national economy. It has been argued by the public that the so called foreign constructors have little or no qualification for the jobs they are awarded. the uncertainty of their technical base does not guarantee safety of the facilities produced by them.

On the contrary, some of our indigenous contractors are well known persons in the area services they render. However, the tendency of not patronizing indigenous construction firms subsequently keeps them perpetually in the lower rung of financial development. When critically studied they only but paint to the death of these indigenous contractors in the future. The time is therefore ripe to proffer lasting solution to the challenges facing indigenous contractors who are the future developers of the national economy.

1.3     OBJECTIVE OF THE STUDY

The aim of this research is to critically analyse the various factors that affect the progress of the indigenous building construction firms so that solutions to aid their growth may be adopted.

The specific objective of this research work is as follows:

1. To determine the effects of government policies and procedures on indigenous.
2. To find out the effects of poor financial structure on the indigenous building construction firm.
3. To suggest was of solving the problem facing the indigenous construction firm.

1.4     RESEARCH HYPOTHESIS

Hypothesis one

Hi:     Government policies and procedures on indigenous building construction firms affect Building firms positively.

Ho: Government policies and procedures on indigenous building construction firms affect Building firms negatively.

Hypothesis Two

Hi: There is a strong relationship between financial base and the challenges faced by indigenous building construction firms.

Ho: There is no relationship between financial base and the challenges faced by indigenous building construction firms.

1.5     SIGNIFICANCE OF THE STUDY

The following are the importance or the usefulness of this study:

1. This research work will be helpful to individuals who will want to develop and own their own construction firms in the country to know the challenges facing the already existing ones in the country and to know how to tackle these challenges.
2. The result of the findings will help building clients the government, builders, professional bodies and building team of specialist to jointly improve working conditions to building professional members in organizing seminars, workshop and conferences.
3. The upcoming researchers will also find this research work very useful because it will serve as a reference material while carrying out a research on similar or a related research topic.

1.5     SCOPE AND DELIMITATION OF THE STUDY

The study is delimited to the indigenous construction firms in Kaduna metropolis. The study will focus on the structure of the indigenous construction firms, the effect of government policies and other socioeconomic factors that affect the indigenous firms like scarcity and high cost of materials, scarcity of quality labour, state of plants and equipment, the problems of personnel development in the industry, poor management of resources and method of contractual procedures.

1.7     LIMITATION OF THE STUDY

The following are the limitation of this research work.

1. Time: Time is one of major constraints to the success of this research work. Because of other activities the researcher is involved in, the study is carried out under a limited time.
2. Finance: Insufficient finance militated against the success of this research work. Much literature were not reviewed and also few library were visited due to insufficient fund.
3. Respondents: Indeed some attitudes of the respondents are discouraging in the sense that some are out rightly snobbish.

1.8     DEFINITION OF TERMS

CONSTRUCTION INDUSTRY: This is the sector of national economy engaged in preparation of land, repair of building structures and other real properties.

BUILDING CONSTRUCTION: Is a process of adding structure to a real property or construction of buildings.

GROSS DOMESTIC PRODUCT (GDP): Is the market value of all officially recognized final goods and services produced within a country in a year, or period of time. GDP per capital is often considered an indicator of a country’s standard of living.

NATIONAL ECONOMIC: This is a national financial resources and its financial management with a view towards its productivity.

GOVERNMENT: The group of people who are responsible for controlling a country or a state, managing the affair economically one made by a government political part, business etc.

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