Experts canvass policies to stop capital flight in construction industry
Nigeria needs deliberate policies that will lead to reducing or stopping completely the challenge of capital flight in the construction industry, real estate and other industry experts have said.
The experts explained that the federal government needs to come up with deliberate policies that would enable the industry to grow, stressing that players in the industry need government support in various ways.
The experts who spoke at the just concluded two-day West Africa Property Investment (WAPI) Summit in Lagos which had as theme, ‘Property Markets Redefined’, noted that the local firms lacked the capacity to compete against their foreign counterparts.
“We are appealing to the Federal Government to create an enabling environment for local construction companies to compete favourably to stop capital flight,” Temitope Runsewe, Managing Director, Dutum Construction Company Limited, said.
“We are one of the indigenous construction service providers and it is important that we receive the support of government so that we can grow,” Runsewe pleaded, explaining that the support should give the local players opportunities and funds that could make them compete.
“If we are not able to compete with the foreign companies, how can we grow?” he queried, noting that foreign companies come with funds at zero percent or one percent while local service providers either cannot get the funds or are getting it at 30 percent and above per annum.
Runsewe, therefore, urged the government to create policies that would give local firms leverage and in terms of special funds with special interest rates to encourage and enable them to compete.
“When you give a local construction company a new project, the money stays here most of the time and gets recycled with positive impact on GDP,” he said, adding, “but when you continue to give the biggest projects to the foreign companies, they do their bit and take the rest of the money out, so we are having capital flight.”
Runsewe emphasized that giving opportunities to local experts would help them gain experience to develop capacity to execute bigger projects for the benefit of the nation, explaining that local firms cannot be on the same competing ground with people who have money from their government.
“It causes unfair competition, so, tilt the competition in our favour so that we can grow our economy,” he said, urging the private sector to come together and fight as a group to actualise their goals of competing favourably to save income for the nation.
He lamented the impact of the COVID-19 on the real estate sector but said it created opportunity to leverage technology to evolve new construction models of building compact apartments where people could live, work and play.
Earlier, at a panel discussion, panelists took turns explaining the need to make buildings more compact due to the increasing population and shrinking resources, including land.
Olaide Agboola, Founder/CEO, Purple Limitted, said there was so much to be done to improve the construction value chain while evolving mixed development for the nation’s growing population.
He said the opportunity of mixed use development where compact construction encompasses work, live and play options was huge for the younger generation, which investors must explore and harness.