Babatunde Fashola (SAN), former Minister of Works and Housing, discussed the positive impact of construction on the economy and projected the expectations for the industry in the next 5 to 10 years.
Gatekeepers News reports that at an event hosted by Julius Berger Nigeria plc on Thursday in Lagos, Fashola noted that construction companies are the easiest way by which wealth can be legitimately distributed in an economy, when they are contracted and financed.
He explained: “I do not know how many urban dwellers appreciate how big the mining and quarrying industry is.
“The assets are located in suburban and rural areas but the impact is felt more in the urban centres, in forms of skyscrapers, luxury flats, highways and bridges built from crushed stones, marble, granite, stone dust and even laterite that has to be mined, loaded and transported.
“Therefore, very few sectors of the economy such as shipping and petroleum drive the haulage and transport sector of the economy like construction.
“From records of economic impact we kept in the Ministry of Works and Housing, I can report 1,704,300 truck trips of haulage of bitumen, diesel, laterite, sand, cement and reinforcement.
“The average minimum cost of a 30 Ton Truck was N200,000 per trip. So, from one Ministry alone at the federal level, excluding 36 states and FCT, this represents a N340.8 Billion haulage economy over 8 years or N42.6 billion per annum.
“This is the employment of transport companies their employees and drivers, enabled by construction.
“Drivers were then paid averagely N5,000 – N7,500 per day.
“I can report 383,431 people directly employed in constructing and rehabilitating 9,290 kilometres of roads and bridges, installing 2,270,319 linear metres of lane marking and installing 254,690 road signs.
“I can report 1,262 building contractors employed in the housing sector to construct 6,000 units of housing with fittings and accessories at 46 sites across 35 states.
“This is just a high-level summary of how extensively construction impacts the economy.
“Apart from evacuating the quarry, all the trucks involved in haulage use fuel, lubricants and spares; this drives demand for other services provided largely by micro small, medium enterprises that are the heartbeat of every economy.
“It is these businesses that put food on the tables of families, pays rent, school fees and medical bills and so much more.
“As I often say, construction companies don’t keep building materials, they only keep minimum basic equipment. So, when they are contracted and financed, they become the easiest way by which wealth is legitimately distributed in an economy.”
Fashola stressed that every economy that seeks expansion, efficiency, and productivity must invest in the commensurate infrastructure in order to achieve it.
“Nigeria is such a country, and as I have said before, we are living largely on infrastructure built in the 70s and 80s because we spent much of the 90s in the agitation to bring back democratic Governance.
“We have a lot of building and construction to undertake and this much is evident in the latest National Infrastructure Master Plan. (2020 – 2043 estimated about $2.3 Trillion over 21 years, that is about $110 billion per annum).
“Therefore in my opinion, the outlook of the construction industry in Nigeria over the next 5 to 10 years and beyond remains highly positive as can be deduced from the Government master plan.”
