Вы находитесь на странице: 1из 15

HABITATINTL. Vol. 19, No. 4, pp.

599-613, 1995
Pergamon Elsevier Science Ltd
Printed in Great Britain.
0197-3975/95 $9.50 + 0.00
0197-3975(95)ooom-8

Indigenous Contractors’ Perceptions


of the Constraints on Contractors’
Performance and Development
Programmes Required in Nigeria
OLUGBOYEGA A. ADAMS
De Montfort University, Leicester, UK

ABSTRACT

Some measures have been formulated and implemented for contractor development
in Nigeria, but these efforts have achieved little success. Whereas the literature is
replete with details of constraints within the Nigerian construction industry and
their impact on indigenous contractors’ performance, little or no information is
available on contractors’ perceptions of the supports prescribed and implemented
for their development. It is premised that the uptake and success of any
contractor development initiative depend on whether contractors, the intended
beneficiaries, perceive proposed programmes as relevant and appropriate to their
needs. This paper reports findings on the perceptions of Lidigenous contractors
on the constraints on their performance in the Nigerian industry and the
measures they perceive as most appropriate to support their development.
The major constraints perceived are uncertainties in supplies and prices of
materials, delayed interim payments, fluctuations in work load and lack of
capital. Contractor development programmes most preferred are those primarily
required to ameliorate the major constraints identified as well as provision of
training to facilitate organisational and management development. The findings
indicate the need for more comprehensive programmes to develop the local
industry. Contractors should also be more involved in the formulation and
implementation of contractor development programmes.

INTRODUCTION

A typical example of a developing country with over-dependence on foreign


construction capacity is Nigeria,
. _
an oil exporting
_ _.
country.
_ _
Deficiencies in
indigenous construction capacity have resulted in an unwholesome dependence
on imports to implement much needed construction projects. Foreign construction
firms dominate the construction industry. The nation embarked on massive
construction programmes during the oil boom period of the 1970s. But shortages
in construction resources and capacity restrained effective realisation of planned
construction programmes.1 There was mass importation of construction materials
and the number of contractors also increased sharply to meet an acute shortfall in
construction capacity. For example, the number of contractors registered with

0 Crown Copyright IYYS

599
600 Olugboyega A. Adam

the Federal Works Registration Board increased six-fold between 1970 and 1979
while that of foreign-owned construction firms incorporated in the country also
doubled, increasing from 82 in 1970 to 161 in 1980.2 Though Nigerian equity
participation in foreign construction firms is now between 40 and 60% as a result
of Indigenisation Decrees of 1972 and 1978, expatriates still control management
and technical functions. They are, therefore, more appropriately referred to as
indigenised foreign firms.
Indigenous construction firms are predominantly small and medium-sized;
their participation in major construction works is marginal. It was estimated
in 1991 that indigenous construction firms undertake only 5% of the purely
civil engineering construction and 25% of the building works, while indigenised
foreign firms undertake not less than 85% of the civil and building construction
combined.3 An analysis of Federal Government projects between 1979 and
1987 showed that indigenised foreign firms undertook over 50% of all road
and highway projects valued at under five million Naira, over 80% of those
between five and ten million Naira and over 90% of those over ten million
Naira.4 They also undertook over 80% of building works valued at over ten
million Naira. Another analysis of over 1,100 construction contracts awarded
by Federal and state governments between 1974 and 1984 showed that while
indigenous contractors obtained 875 contracts, that is, 77% of the total number
of contracts considered, the total value of the contracts awarded to them was
under 11 million Naira, representing less than 7% of the total volume of works
involved.5 The on-going development of the new national capital, Abuja, is
also dominated by indigenised foreign construction firms, providing further
evidence of the perennial marginalisation of indigenous contractors in national
development projects.

RESEARCH OBJECTIVES

A number of measures have been formulated and implemented for contractor


development in developing countries. However, most attempts have achieved
little because they concentrated on the symptoms and not the roots of the
problems.6 In addition, they were based on programmes that have worked in the
industrialised countries. There is little evidence that contractors were involved
in the formulation of programmes proposed for their development. Studies
have shown that small business owner-managers generally display considerable
resentment to pre-packaged, ‘this-is-what-is-good-for-you’ development schemes.7
Insight to contractors’ perceptions of their problems and needs in the industry
will avoid imposing programmes that do not meet their expectations. This study
investigated the factors perceived by indigenous contractors as major constraints
on their performance in the Nigerian industry. It also assessed their perceptions
of some contractor development measures in order to determine the relative
importance of these supports as perceived development needs in the industry.

CONSTRAINTS ON NIGERIAN INDIGENOUS CONTRACTORS

The difficulties experienced by small contractors in developing countries are


described succinctly by the IL0 as below. *s Most of these factors have been
identified in the literature on the Nigerian construction industry and are
subsequently briefly discussed.9
(i) Difficulties presented by the particular market and business environment in
which the contractor is operating:
??procuring work on a steady basis;
?? access to investment and working capital;
Perceptions of the Constraints on Contractors’ Performance 601

?? shortages of skilled labour;


?? delays and uncertainties with respect to supplies and prices of materials;
and
?? access to plant, equipment and spares.
(ii) Difficulties deriving from clients, including:
?? design changes, incomplete or unclear drawings and specifications;
?? inadequate supervision;
?? delayed interim and final payments; and
?? unfavourable contract conditions.
(iii)Difficulties deriving from the shortcomings and inadequacies of contractor
himself, especially:
?? deficiencies in technical understanding;
?? lack of familiarity with procedures in construction;
?? unfamiliarity with the legal aspects of contract;
?? lack of understanding of basic site management and contract planning;
?? poor financial management; and
?? ineffective company organisation and management.

Dificulties presented by the particular market and business environment in


which the contractor is operating
Construction being capital-intensive, demand in any country fluctuates with
the economic climate. The situation in Nigeria is further exacerbated by
the industry’s over-dependence on public clients. Declining oil revenue has
caused a considerable down-turn in government construction demand. Increased
competition for the few available jobs that are within indigenous contractor’s
capacity has resulted in few or no jobs for most of them. Non-advertisement
of tenders is prevalent in the Nigerian industry and there is apparent lack of
government policy on standard procedure on contract award.10 The situation
deprives many competent contractors of access to work and creates room for
corruption, malpractices and political manipulation in the award of public
contracts. Fraudulent practices and kickbacks were identified as some of the
major causes of high construction costs and project delays.11
Many Nigerian indigenous firms lack expertise and resources in estimating to
provide realistic tenders to obtain jobs through competitive tendering.12 Their
ability to compete for major projects, hence participate effectively in national
development, have also been frustrated by prejudice. Government officials, on
the excuse that the nation was in a hurry to develop and only good and well
established contractors who could complete projects in a short time were to be
considered, favoured foreign firms at the expense of even the capable among
large indigenous contractors.13
Lack of adequate capital is a major factor precluding Nigerian contractors from
capital intensive contracts. 14 They are limited to their own financial resources
and personal credibility to attract loans. Lack of collateral as well as poor
financial management habits, especially lack of good accounting records, also
inhibit their ability to raise bank loans.15
Shortage of skilled manpower was identified as a major restraint on the
effective realisation of past development plans. 16 Indigenous contractors have
difficulty competing with government institutions or foreign firms for available
skilled manpower in view of more attractive remuneration, job security and
career prospects the latter could offer. Commendable efforts have been made
to improve manpower supply for all sectors of the economy. Unfortunately,
economic recession created considerable underemployment of skilled manpower
produced to meet anticipated demand. It is estimated that employment in the
construction industry has reduced by over 65% since 1980.17 A recent study
602 Olugboyega A. Adams

also showed that shortage of skilled labour is no longer a major problem in the
industry, contrary to an earlier observation.18
Nigeria is heavily dependent on imports, either as finished construction
materials or as inputs for domestic production. Supplies of building materials
therefore depend largely on availability of foreign exchange and government
fiscal policies on importation, which are both determined by revenue from
petroleum export, the mainstay of national foreign exchange earnings. Other
factors contributing to the irregular supply of construction materials and intractable
fluctuations in prices include inadequacy of locally manufactured materials in
terms of quality and quantity, the high cost of domestic manufactures arising
from high wages, the inadequate supply of basic services such as electricity,
transport, communications and water supply, as well as imported inflation
and the monopolistic structures of distributive trades in Nigeria and high
distribution charges. 19 Designers also compound the problem by specifying
imported materials which are sometimes inadequate for Nigerian conditions.20
Construction plant, equipment and spares are mostly imported, and hence very
expensive. Lack of capital means that indigenous contractors cannot afford the
basic equipment and plant required to undertake major projects. Unfortunately,
plant and equipment hire and leasing facilities are either grossly inadequate or
unavailable in many areas. The precarious nature of the construction business,
especially access to regular jobs to amortise investment, also makes equipment
ownership unattractive. Equipment maintenance constitutes a major problem
to the few who can afford to buy. Their fleet of equipment is not usually of a
particular brand type; rough usage, lack of spares and poor maintenance also
limit effective utilisation and maintenance.21

DifFculties deriving from client and client representatives


Protracted delay in payments to contractors is prevalent in Nigeria as in most
developing countries. This severely affects the financial situation of indigenous
contractors. Public clients are often the worst culprits and fear of reprisals,
particularly losing clients’ goodwill for future job opportunities, often inhibits
contractors from taking legal steps to recover outstanding money.** Lack of
understanding of public administration procedures also inhibits indigenous
contractors’ ability to expedite overdue payments.23
Lack of standard conditions and terms of contract was noted as a major cause
of confusion in the Nigerian industry. 24 The variety of forms of contracts in use
are imported from the British building industry; they are unsuitable for the
particular situation in Nigeria, adversely affecting project delivery. Contract
provisions are one-sided in favour of the employer and enforcing compliance
is difficult, while mistakes, discrepancies, inconsistencies in documentation and
inaccurate estimates of bills of quantities cause design changes and other major
factors responsible for high cost and time overruns.25 The problem of inadequate
contract documentation is compounded by poor contract management by client
representatives, creating delays in inspection and testing of completed works and
preparation of interim payment certificates. Site supervision on public-funded
projects is often inadequate irrespective of the simplicity or complexity of
construction projects.26 As a result, contractors (both foreign and indigenous)
get away with errors or intentionally fail to meet specified standards.

Dijjkulties deriving from personal inadequacies of contractors


Lack of technical expertise is generally recognised as one of the major constraints
of small contractors in most developing countries. The low technical capacity
of most Nigerian firms is evident in the number of registrants at the lowest
Perceptions of the Constraints on Contractors’ Performance 603

contractor registration category; charlatans have also exploited lapses in registration


procedures.27
Poor educational background and lack of managerial exposure were identified
as largely responsible for deficiencies in planning and management skills among
Nigerian contractors. 2s Most are one-man firms; they show little in the way
of coherent business policy and do not appear to plan in any explicit way
for growth, the handling of information, storage and retrieval of documents,
keeping of records, book-keeping, and above all, preparation of budgets and
accounts, all of which require motivation and skills that the average Nigerian
contractor has not yet acquired to any marked degree. There is lack of good
work organisation as well as effective planning and utilisation of resources on
construction sites, while very few employ scientific techniques to plan their
work.29 The problems of poor financial management and lack of organisation
are further complicated by the fact that an average Nigerian contractor relishes
ostentatious living, spending the anticipated profits before earning them.30 Many
squandered the mobilisation advances granted them on government contracts
on frivolous things, such as new expensive cars or houses, even before work
started on site. A good many are not fully committed to construction; rather
than reinvesting profits made to further expand their construction business,
they quickly diversify into other enterprises unrelated to construction.31 Some
lack understanding of contractual rights and responsibilities; they have to be
reminded to present claims for contract variations.32

Summary
Though abundant normative information exists on difficulties in the Nigerian
construction industry, empirical studies on indigenous contractors’ perceptions
of the impact of constraints on their performance are sparse. Researchers have
focused on specific problems in the industry, for example, causes of project delay
and high cost overruns. Aniekwu and Okpala classified a range of problems
(a total of 27 variables) encountered by indigenous contractors in Nigeria
as structural variables (resulting from the inherent conditions and practices
within the environment) and systemic variables (resulting from the application
of systems not suitable to the environment) .33 Though most of the variables
identified are similar to those often mentioned in the literature as constraints
on indigenous contractors’ performance, their studies failed to provide details
on indigenous contractors’ perceptions of the impact of the variables identified.
There is a need, therefore, for further empirical studies to establish the relative
importance and impact of factors identified as constraints on the performance
of indigenous contractors in the Nigerian industry.

CONTRACTOR DEVELOPMENT IN NIGERIA

A number of measures have been formulated and implemented by successive


Nigerian governments to promote and develop indigenous contractors. This
started in the 1950s with pre-independence nationalist agitations for special
concessions to increase indigenous contractors’ participation in construction,
which accounted for a substantial part of government capital expenditure.34
Contractors’ registration was thrown open and liberalised; this substantially
increased the number of indigenous contractors at Federal and regional levels
and also allowed all shades of people to obtain registration as contractors.
Different measures were subsequently pursued at various times by successive
governments to promote effective participation of indigenous contractors in
construction projects. Contract splitting (slicing and packaging of larger jobs into
604 Olugboyega A. Adams

a number of smaller jobs within the capacity of indigenous contractors) was one
of the earliest attempts made by Federal and regional governments to increase
indigenous participation in government contracts, but this tapered off by the mid-
196Os.35 There were informal, unsystematised preferences given to indigenous
contractors in the 1970s to increase indigenous contractors’ participation in public
projects. There was a Federal Government 2.5% price preference for Nigerian
owned firms and an implicit understanding pervading the government structure
that indigenous firms were to be favoured. 36 Some contracts were reserved
exclusively for indigenous contractors while petty contracts were shared on a
simple rotational basis among contractors registered in the area.37 Ten per
cent of contract sums was also paid up-front as mobilisation allowance on
government contracts to minimise the perennial problem of under-capitalisation
faced by Nigerian contractors. In order to address the problem of shortages of
skilled staff, some state governments directed their project supervisory staff to
assist indigenous contractors in solving some of the technical problems they
encountered on government works. 3s Unfortunately, this was short-lived due
to shortages of government supervisory staff. In order to facilitate access to
scarce materials, especially on public projects, government bulk purchase units
(now defunct in most states) and government-owned firms producing building
materials were directed to give priority to contractors. Many contractors
however diverted supplies to other projects or sold them at open markets for
quick high profits. Special management training for contractors was provided
briefly between 1978 and 1980 by the Centre for Management Development,
jointly sponsored by the IL0 and the United Nations Development Programme
(UNDP). This was discontinued at the end of the sponsorship period.
Past efforts directed to promote the development of indigenous contractors
seemed to be ineffective as indigenised foreign firms still dominate the industry.
Support programmes offered have not been pursued consistently for long enough
to effect tangible results. Measures providing direct financial benefits were over-
emphasised, despite obvious indications of their ineffectiveness. For instance,
malpractices and corruption were rife in the implementation of the mobilisation
advance. It was often used as kickbacks for government officials and for party
financing by civilian governments, while many ghost contractors vanished after
collecting the money. 39 Attempts to curb abuse led to intermittent withdrawal
of much needed support. Other concomitant programmes proposed to promote
sustainable development have been neglected. 40Unfortunately, many indigenous
contractors also lacked commitment to produce goods results.41 They did not
take advantage of available opportunities to develop their firms. In addition,
political instability has caused frequent government policy changes or wavering
commitment to the implementation of formulated policies.
The literature is replete with problems of domestic contractors in developing
countries and recommended solutions. Many of the proposed remedies have
not been very effective for aforementioned reasons. The expectations of the
contractors are critical to the use or success of proposed programmes. It is
necessary, therefore, to evaluate indigenous contractors’ perceptions of their
problems in order to establish felt needs, hence programmes that will be effective
in enhancing their performance and development in the Nigerian industry.

RESEARCH METHODOLOGY AND LIMITATIONS

Self-administered questionnaires were used to obtain information on the personal


characteristics of respondents, their perception of 26 variables constraining the
performance of indigenous contractors and 20 contractor development variables
derived mainly from the IL0 .a* Respondents also had the opportunity to identify
Perceptions of the Constraints on Contractors’ Performance 605

other factors not listed. A six-point numerical rating scale with verbal end-points
(1 for little importance and 6 for very important) was used. Draft questionnaires
were discussed with some British and Nigerian experts prior to pre-testing on five
Nigerian contractors to check the suitability and appropriateness of questions.
Factors that inhibit true random sampling in survey research in developing
countries and in the small-business sector have been highlighted in the literature.43
Lack of comprehensive lists of contractors from which accurate sampling frames
could be developed, and difficulty in obtaining the co-operation of potential
respondents necessitated the use of non-probability sampling techniques. Purposive,
convenience and snowballing sampling techniques were used. Key professionals
employed by major public and private clients were identified and used as agents
to reach contractors (snowballing) for inclusion in the sample. Only contractors
known to be actively involved in construction business were selected (purposive
sampling) to avoid the experience of an earlier study in which many contractors
on the list of the Federal Works Registration Board could not be traced in the
field.” Contractors available on many of the researchers’ unscheduled visits to
contractors’ head offices, construction sites or professionals’ offices were also
included in the sample (convenience or accidental sampling).
Questionnaires were hand-delivered to a sample of 200 owner-managers of
indigenous construction firms operating primarily in the formal sector, selected
by non-random sampling techniques from three south-western states in Nigeria:
Lagos, Oyo and Ogun. A sample size of 200 was considered reasonable for this
exploratory study. A total of 69 questionnaires were returned, that is, 34.5%
of the total sent.

PRESENTATION AND ANALYSIS OF RESULTS

Frequency distributions of responses and percentages based on actual responses


are used to report the characteristics of the respondents. Percentage responses
relating to the importance of the variables on the six-point scale are presented.
However, a rating of 1 or 2 implies that the variable is not perceived as
important, 3 or 4 means that it is marginally important, while 5 or 6 means
it is very important. The average weighted response (AWR) used to rank the
relative importance of each variable is defined as:

where f is the number of respondents and x is the numerical rating (ranging


from 1 to 6) given to the variable by the respondents.

Characteristics of contractors responding to the questionnaire


Only two women were among the 69 respondents. This is not far from
expectation; construction is still a male dominated profession. Eighty-five
per cent of respondents are married. The age distribution of the sample is
mostly between 25 and 54; the mean age is 41 and the modal age group is
35-44 years. Sixty-two percent of respondents are under 45 years. Table 1
shows the educational attainment of contractors; 83% had formal education
beyond secondary school level while 75% have construction qualifications and
44% have degree and postgraduate qualifications.
The findings also show that the majority of indigenous construction firms
employ less than 25 workers. Table 2 shows that 58% of the contractors sampled
have less than 25 employees.
606 Olugboyega A. Adams

Table 1. Educational attainment of contractors

Educational level Frequency Valid (%)

Primary school 1 1.5


Secondary school 4 5.8
Trade school (craft cert.) 7 10.1
Polytechnic diploma (construction) 27 39.1
University (construction degree) 14 20.3
University (non-construction degree) 5 7.3
Postgraduate (construction) 11 15.9

Total 69 100.0

Table 2. Number of employees in contractors’firms

Number of employees Frequency Valid (%)

None 2 2.9
14 4 5.8
5-10 17 24.6
1l-24 17 24.6
25-49 15 21.7
50-100 5 7.3
> 100 9 13.1

Total 69 100.0

Further analysis showed that 75% of the sample have at least one other
management staff apart from the owner-manager. It is possible that the
management staff of respondents include some non-salaried employees, particularly
graduates undertaking 1 year compulsory national service. Economic recession
has forced many highly skilled unemployed construction supervisory/managerial
personnel to take up employment with small firms which they used to shun.
Most respondents have been in the construction business for less than 15 years
as shown in Table 3. About 62% of the respondents have been in business for less
than 10 years. This age distribution shows that most of the respondents entered
the construction business in the 1980s in the wake of economic recession in
Nigeria. Fifty-five per cent operate as limited liability companies while the rest
of the respondents are sole proprietorships (23%) or partnerships (22%). The
average number of owners in partnerships or limited liability companies was
found to be three.

Table 3. Age of contractors’firms

Age of firm Frequency Valid (%)

Under 5 years 22 32.3


5-9 years 20 29.4
10-14 years 14 20.6
15-19 years 8 11.8
20-25 years 1 1.5
> 25 years 3 4.4
No response 1 -

Total 69 100.0

Tables 4 and 5 describe the nature of the construction works and the value
of contracts the respondents were registered to undertake. Seventy-two per cent
of the respondents undertake both building and civil engineering works while
86% are registered to tender for small/medium sized contracts valued at under
Perceptions of the Constraints on Contractors’ Performance 607

2 million Naira. Of the contractors sampled 66% undertake mainly new works
while government is the main client of 56%. Thirty-three per cent are involved
in other construction related business activities while only 24% are involved in
other non-construction related businesses.

Table 4. Type of construction works undertaken by contractors

Type of work Frequency Percentage

Residential buildings 12 18.5


Non-residential buildings 5 7.7
Civil engineering 1 1.5
Buildings/civil engineering 47 72.3
No response 4 -

Total 69 100.0

Table 5. Registration categories of contractors

Value of work in Naira* Frequency Percentage

< N50,OOO 1 1.5


N50,000-N250,OOO 26 37.1
N250,000-N2 million 33 47.8
> N2 million 9 13.0

Total 69 100.0

*Nl was equivalent to US$l.S in 1982.

Major problems and contractor development measures perceived by contractors


Respondents’ perception of the impact of 26 variables on the performance
of indigenous contractors in the Nigerian industry are presented in Table 6.
Additional constraints identified by the respondents are shown in Table 7.
Table6. Perception of indigenous contractors on constraints on performance

Percentage responding Average


weighted Rank
Variables 6 5 4 3 2 1 response order

Uncertainties in supplies & prices of materials 37.7 37.1 13.1 4.3 2.9 4.3 4.90 1
Obtaining interim payment 29.4 27.9 13.2 20.6 1.4 1.5 4.47 2
Procuring work regularly 32.8 19.4 26.8 1.5 6.0 7.5 4.43 3
Access to capital 31.7 13.0 15.9 20.3 10.2 2.9 4.39 4
Negotiating variation payment 29.0 14.5 26.1 7.2 14.5 8.1 4.10 5
Access to plant and equipment 23.2 23.2 14.5 18.8 8.7 11.6 3.99 6
Inappropriate contract conditions 18.8 17.4 18.8 23.2 10.2 11.6 3.77 7
Maintaining plant and equipment 18.8 13.1 17.4 18.8 17.4 14.5 3.54 8
Resolving contract disputes 14.5 16.0 13.0 8.7 27.5 20.3 3.20 9
Meeting contract deadline 11.8 5.9 19.1 29.4 19.1 14.7 3.18 10
Design changes 10.3 5.9 23.5 22.1 22.1 16.1 3.12 11
Incomplete contract documents 7.2 11.6 16.0 23.2 21.7 20.3 2.99 12
Transporting materials and equipment 5.8 10.2 18.8 21.7 21.7 21.7 2.91 13
Materials control on site 1.5 13.0 17.4 31.9 14.5 21.7 2.90 14
Providing reliable tenders 7.3 11.6 10.1 18.8 29.0 23.2 2.80 15
Communicating with client/representative 5.8 10.2 8.7 23.2 30.4 21.7 2.73 16
Shortages of skilled labour 5.8 8.7 11.6 16.0 27.5 30.4 2.58 17
Public image 4.4 7.3 11.8 22.1 25.0 29.4 2.56 18
Accounting and financial management 4.3 4.3 8.7 29.0 23.2 30.5 2.46 19
Inadequate supervision by client/representative 2.9 5.8 15.9 10.2 36.2 29.0 2.42 20
Planning of work and site management 1.5 4.4 13.0 15.9 33.3 31.9 2.29 21
Technical know-how 5.8 5.8 11.6 7.2 26.1 43.5 2.28 22
Commitment to construction 1.5 4.4 16.2 14.7 22.0 41.2 2.25 23
Company organisation 1.5 4.3 10.1 20.3 29.0 34.8 2.24 24
Personnel management 2.9 2.9 10.2 18.8 27.5 37.7 2.22 25
Providing quality workmanship 4.3 1.5 8.7 20.3 24.6 40.6 2.19 26
608 Olugboyega A. Adams

Table 7. Other constraints on indigenous contractors’performance

Problem Frequency

corruption 5
Changes in government and economy 1
Prejudice against indigenous contractors 5
Theft and fraud by own employees 1
Taxation 2
Breach of contract by public clients 1

The six highest ranked constraints in descending order of importance are


uncertainties in supplies and prices of materials, obtaining payments for work
done, obtaining work regularly, access to capital, negotiating payments for
variations and access to plant and equipment. The first, third, fourth and sixth
highest ranked constraints are difficulties emanating from, or imposed by, the
business environment while the second and fifth constraints are client-induced
problems. Variables beyond the managerial control of the respondents were
perceived to constitute the greatest constraints on performance. Difficulties
emanating from the business environment were perceived to be relatively more
severe. They were rated as very important (5 and 6 on the rating scale) by
between 45 and 75% of the respondents while only one client-induced problem
- obtaining payment for work done, was rated as very important by more than
50% of the respondents. On the other hand, difficulties emanating from personal
deficiencies of contractors were perceived as imposing the least constraints on
performance and ranked mainly among the last 10 variables. The majority of
the respondents (more than 60%) did not consider deficiencies in planning
of work or site management, technical understanding of work, commitment
to construction business, company organisation, personnel management and
quality assurance as important constraints on their performance. In addition,
shortcomings in contract conditions, documentation or administration were not
perceived as very important constraints by the majority of the respondents.
The respondents’ perception of the relevance and importance of various
contractor development measures to the situation of Nigerian contractors are
shown in Table 8. Fifteen out of the 20 support programmes were perceived as
very important (5 and 6 on the rating scale) by the majority of the respondents.
The seven highest ranked programmes were perceived as very important by more
than two-thirds of the respondents. The six highest ranked support programmes,
in descending order of importance, are: more efficient payment procedures,
planned government demand for construction, improved access to materials,
provision of loans or loan guarantee scheme, provision of plant hire and provision
of mobilisation allowances. They are measures against the intractable problem of
delayed payment by the client and other externally imposed constraints in the
business environment, namely: lack of regular work, shortages of material and
inadequate capital base. However, training and advisory services, the seventh
highest ranked measure, addresses deficiencies in personal skills and knowledge.
Other highly rated programmes are potential solutions to other major constraints
perceived by the respondents as shown in Table 9.
Though most of the support programmes were perceived as important, the
contractors seem to be quite realistic in their perceived needs. The relative
importance of a more efficient payment procedure among other supports, is
understandable in view of acute difficulties in the Nigerian industry as a result of
delayed interim payment, the second most important constraint. More efficient
payment procedure would also ameliorate the perennial financial problem of
most indigenous contractors who depend mainly on payments for work done
to finance ongoing projects. Ironically, the contractors sampled felt that the
provision of the mobilisation advance (the sixth ranked support), which is
Perceptions of the Constraints on Contractors’ Performance 609

the main financial support available to contractors, is not as important as


prompt interim payments or improved access to loans (the fourth ranked support
programme). Reduction of the amount retained by clients was not perceived as
very important by the majority of the respondents.

Table 8. Indigenous contractors’ perception of contractor development programmes

Percentage responding Average


weighted Rank
Variables 6 5 4 3 2 1 Response

More efficient payment procedures 71.0 17.4 7.2 4.4 0.0 0.0 5.55 1
Planned govt. demand for construction 63.8 15.9 11.9 4.3 1.5 2.9 5.28 2
Improved access to materials 58.0 26.1 7.2 4.3 1.5 2.9 5.26 3
Provision of loans/loan guarantee scheme 56.5 23.2 13.0 5.8 0.0 1.5 5.26 4
Provision of plant hire 47.8 31.9 13.0 5.8 1.5 0.0 5.19 5
Provision of mobilisation allowances 53.6 17.4 18.8 5.8 2.9 1.5 5.09 6
Training and advisory services 43.5 29.0 8.7 10.1 5.8 2.9 4.86 7
Improved tendering procedures 37.7 26.1 20.3 8.7 4.3 2.9 4.75 8
More efficient contractor registration 36.2 29.0 20.3 5.8 5.8 2.9 4.75 9
More equitable contract conditions 37.7 18.8 23.2 14.5 5.8 0.0 4.68 10
More subcontracting by larger firms 40.3 22.4 13.4 9.0 5.9 9.0 4.55 11
Standardisation of contract documents 30.4 31.9 14.5 7.2 11.6 4.4 4.49 12
Lower retention money 36.2 18.8 11.6 17.4 10.2 5.8 4.36 13
Incentives for small firms to team up 32.4 29.4 11.8 5.9 7.3 13.2 4.34 14
Tendering preferences 23.9 26.9 17.9 16.4 10.4 4.5 4.24 15
Standardisation of design 29.0 17.4 18.8 14.5 14.5 5.8 4.15 16
Contract splitting 21.7 20.3 24.6 15.9 13.0 4.5 4.09 17
Less use of direct labour 25.0 22.1 13.2 11.8 13.2 14.7 3.89 18
More active contractors’ association 20.3 21.8 14.5 15.9 15.9 11.6 3.80 19
Govt. sponsored contractor dev. agency 14.7 20.6 17.6 17.6 16.2 13.3 3.60 20

Table 9. A comparison of constraints on indigenous contractors’ performance and contractor development


programmes perceived as important

Constraint Rank Support programme Rank

Obtaining interim payment 2 More efficient payment procedures 1


Procuring work regularly 3 Planned govt demand for construction 2
Uncertainties in supplies & prices of materials 1 Improved access to materials 3
Access to capital 4 Provision of IoansiIoan guarantee scheme 4
Access to plant and equipment 6 Provision of plant hire 5
Maintaining plant and equipment 8
Access to capital 4 Provision of mobilisation allowances 6
Technical and managerial skills 19-26 Training and advisory services 7
Procuring work regularly 3 Improved tendering procedures 8
Technical know-how 22 More efficient contractor registration 9
Commitment to construction 23
Inappropriate contract conditions 7 More equitable contract conditions 10
Negotiating variation payments 5
Resolving contract disputes 9
Procuring work regularly 3 More subcontracting by larger firms 11
Incomplete contract documents 12 Standardisation of contract documents 12
Access to capital 4 Lower retention money 13
Procuring work regularly 3 Incentives for small firms to team up 14
Procuring work regularly 3 Tendering preferences 15
Design changes 11 Standardisation of design 16
Procuring work regularly 3 Contract splitting 17
Procuring work regularly 3 Lesser use of direct labour 18
More virile contractors’ association 19
Govt. sponsored contractor dev. agency 20
610 Olugboyega A. Adams

Planned government demand for construction, the second highest ranked


support programme, would alleviate difficulties in obtaining work regularly
which ranked as the third most important constraint. Regular access to work
is pivotal to effective realisation of other contractor development measures and
sustained development of indigenous contractors. Other measures perceived
as very important by the majority of the respondents in improving access to
work include: improved tendering procedures, more subcontracting by larger
firms, standardisation of contract documents and formation of larger firms by
indigenous contractors. The use of less direct labour and the splitting of a large
contract to smaller portions were not perceived as very important by the majority
of the respondents, while preferential treatment of indigenous contractors in the
tendering process was given marginal support by the majority.
The third most important support programme, improved access to materials,
addresses the highest ranked constraint, the seemingly invincible problem of
fluctuations in material supplies and prices. Domestic production of construction
materials has increased but inadequate supply of imported inputs still limits
outputs. The significance of improving local sourcing of materials as well as
the distribution network cannot be overemphasised in view of the effects that
fluctuations in materials supplies and prices have on project cost and time.
The fifth highest ranked support, the provision of plant and equipment hire,
will minimise the sixth and eighth highest constraints, difficulty in access to
plant and maintenance of own equipment, respectively. Decline in foreign
exchange earnings, coupled with the intractable foreign debts crisis, have led
to devaluation of local currency and have drastically curtailed ability to import
essential machinery or spares. Though the structural adjustment programme
(SAP) has promoted limited local fabrication of equipment spares, more efforts
are still required in this respect.
Though most of the respondents indicated that personal deficiencies in
technical and managerial skills constitute little or no constraint on their per-
formance, it is surprising that training and advisory services support programme
ranked as the seventh most important support desired. It seems that the
respondents are more willing to admit their need for training to improve
business performance rather than accept any lack in their personal skills
or knowledge. Training has been neglected in past government contractor
development programmes, probably on the assumption that the Centre for
Management Development which was established to provide management
training for the private sector will cater for this need. Unfortunately, the
centre has failed to pay attention to the needs of the construction industry.
Contractor development agencies and contractor associations have helped to
promote domestic contractors in many developing countries. Unfortunately, the
majority of the respondents did not consider these institutions as important
initiatives in the Nigerian industry.

CONCLUSIONS AND RECOMMENDATIONS

The study observed that a new crop of indigenous contractors is emerging in


Nigeria. Economic recession has probably forced some qualified construction
professionals into the contracting sector. This category of contractors should
be the primary target group in future contractor development programmes
as they will probably be more committed to construction entrepreneurship,
hence enhancing their firms’ performance and prospects. The majority of the
contractors sampled were of the opinion that the most important constraints on
their performance emanate from the business environment in which they operate
as well as from the client. Major constraints identified include: uncertainties in
Perceptions of the Constraints on Contractors’ Performance 611

supplies and prices of materials, obtaining interim payments, obtaining regular


jobs, access to finance and plant and equipment. These are typical problems
faced by small contractors in most developing countries. Respondents also felt
that lack of skilled labour is no longer a major constraint in the Nigerian industry,
while lapses in contract conditions, documentation and management are not
major obstacles to indigenous contractors’ performance. But they failed to admit
any shortcomings in their managerial skills and knowledge. This, however, is not
unusual. Studies have shown that small business owner-managers in general,
and contractors in particular, consider external uncontrollable variables as the
major cause of business problems and tend to ignore the significance of internal
variables under their managerial control.4s
Notwithstanding, the respondents were quite realistic on programmes perceived
as most important for contractor development in the Nigerian industry. The
highest felt needs are also measures to alleviate the major constraints perceived,
namely, prompt payment for work done, planned government demand for
construction to provide regular work, as well as improved access to basic
resources, i.e. money, materials and machinery required to execute projects
efficiently. Provision of training was perceived as next in importance to these
primary needs. The majority of respondents also felt that financial support in the
form of payment of mobilisation advance is not as important as prompt payment
for work done or access to loans. This indicates that the respondents are not self-
serving. In addition, they also considered more efficient contractor registration
as very important. Though inefficient contract conditions, documentation or
the tendering process were not perceived as major constraints to contractors’
performance, the majority of the respondents considered improved tendering
procedures and better contract conditions as very important. The need for
urgent review of existing systems and practices can not be discounted. The
findings also indicate that there is a general dislike by the contractors for the
idea of an institution or agency for contractor development, as is the case in
many developing countries. This could be as a result of observed failures of
similar institutions that have been established in other sectors of the economy.
The findings of this study can not be generalised to the entire population
of indigenous contractors in Nigeria due to its limited geographical coverage
and the use of non-probability sampling techniques. The low response rate,
understandably a consequence of political uncertainties prevailing in the country
at the time of the study, further increased non-representativeness. However,
the findings of the study provide useful insights into the indigenous contractors’
expectations.
There is little evidence that indigenous contractors were involved in past
government support schemes. They should actively participate in the formulation
and implementation of future contractor development programmes. Past govern-
ment policies on contractor development also failed to make any impact because
wrong or non-essential solutions were offered. For example, the major support
provided by government in the past was the mobilisation allowance, which ranked
sixth in the expectations of the contractors samples. Unfortunately, the recently
formulated National Construction Policy failed to specifically address the issue
of contractor development. 46 The findings of this study indicate that more
comprehensive construction industry programmes are required. The major focus
should be on improving contract administration procedures to ensure prompt
payment for work done, especially on government contracts. Another area of
focus is planned government demand for construction. Future development
plans should avoid the mistakes of the oil boom era. Projects proposed should
emphasise utilisation and development of domestic construction capacity. The
intrinsic problem of shortages of materials also needs urgent attention. Though
SAP has enhanced local sourcing of some imported inputs, more concerted
612 Olugboyega A. Adams

efforts will be required to promote research and development in indigenous


materials and to promote their utilisation, as well as commercial production
of the products developed. Provision of interest-free mobilisation payment
improves contractors’ working capital and cushions difficulties arising from
delayed payments, though it is not perceived to be as important as provision of
loans. This emphasises the need for improved access to bank loans for indigenous
contractors. Contractor training, which has hitherto been neglected, should be
also emphasised in future contractor development programmes. A special unit
should be established within the Centre for Management Development for
contractor training. Further studies are required to identify training needs of
Nigerian contractors and the most appropriate delivery systems.

AcJcnowledgements - I am greatly indebted to the Association of Commonwealth Universities and to the


British Council for sponsoring the study. My gratitude also to the University of Lagos, in particular my
former colleagues at the Department of Building and Faculty of Environmental Science for their support.
My sincere appreciation to Professor John Andrews for his guidance through the study. I am grateful to
Dr Jill Wells and Dr Bunmi Fagbemi for their comments on earlier drafts of this paper. The support of
many friends, relatives and colleagues who helped to administer the questionnaires in Nigeria, as well as
the contractors who responded, is also acknowledged and appreciated.

NOTES
1. Federal Republic of Nigeria (FRN), Third National Development Plan 1975-80 (Federal Ministry of
Economic Development, Lagos, 1975). FRN, Fourth National Development Plan 1981-85 (Federal
Ministry of National Planning, Lagos, 1980).
2. O.A. Adams, “Contractors’ Registration Requirements in Nigeria: Need for a Critical Review”,
Journal of Construction in Nigeria 4, 2 (1987), pp. 24-31. T.J. Biersteker, Multinationals, the State,
and Control of the Nigerian Economy (Princeton University Press, New Jersey, 1987).
FRN, National Construction Policy (Federal Government Press, Lagos, 1991).
0.0. Olugbekan, “The Construction Industry and the Nigerian Engineer”, paper presented at the
Tenth October Lecture of the Nigerian Society of Engineers, Lagos, October 1991.
B. Olateju, “An Evaluation of the Level of Participation of Indigenous Contractors in the Construction
Industry in Nigeria between 1974 and 1984”, Nigerian Engineer 26, 3 (1991) pp. 1-15.
G. Ofori, “Programmes for Improving the Performance of Contracting Firms in Developing Countries:
A Review of Approaches and Appropriate Options”, Construction Management and Economics 9
(1991), pp. 19-38.
7. J. Curran, “TECs and Small Firms: Can TECs Reach the Small Firms other Strategies Have Failed
to Reach?“, paper presented to the All Party Social Science and Policy Group, House of Commons,
1993.
ILO, Guidelines for the Development of Small-scale Construction Enterprises (ILO, Geneva, 1987).
t : A.N. Aniekwu and D.C. Okpala, “Contractual Arrangements and the Performance of the Nigerian
Construction Industry (the Structural Component)“, Construction Management and Economics 5
(1987), pp. >ll. A.N. Aniekwu and D.C. Okpala, “The Effect of Systemic Factors on Contract
Services in Nigeria”, Construction Management and Economics 6 (1988), pp. __ 171-182. 0. Diatchavbe,
“Indigenisation of Construction Industry in Zaria. A Case Study”, in Construction in Nigeria,
Proceedings of 1974 Annual Conference (Nigerian Economic Society, Ibadan, 1974). M.M. Dlakwa
and M.F. Culpin, “Reasons for Overrun in Public Sector Construction Projects in Nigeria”, Project
Management 8 (1990), pp. 237-241. G.A. Edmonds, Labour Substitution in Construction: A Case Study
of Nigeria, unpublished PhD Thesis, University of Leeds (1975). D.C. Okpala and A.N. Aniekwu,
“Cause of High Costs of Construction in Nigeria”, Journal Construction Engineering and Management
14 (1988), pp. 233-244. G.A. Ogunpola, “The Pattern of Organisation in the Building Industry: A
Western Nigeria Case Study”, Nigerian Journal of Economic and Social Studies 10 (1968) pp. 339-360.
K.A. Wahab, “Improving Efficiency in the Building Sector”, West African Technical Review (May
1977), pp. 81-89, M.T. Iyortyer, Limits to Growth in Effkiency of Contracting Firms in Nigeria,
unoublished MSc Reuort. Universitv Colleee London 0983). Intermediate Technoloev. Niaerian
Building Contractors:’ Practices, Problems &d Needs (Intermediate Technology, Lo&n, !970),
S.P. Schatz, Nigerian Capitalism (University of California Press, Berkeley, CA, 1977). A.U. Ehnwa
and S.A. Buba, “Construction Cost Factors”, Journal of Construction Engineering and Management
119 (19X), pp. 698-713.
10. Olugbekan (1991), see note 4. E.O. Olowookere, “Construction Practice and Management in Nigeria:
Ways and Means of Minimising Construction Costs”, paper presented at Commemorative Seminar of
the 10th Anniversary of the Nigerian Building and Road Research institute, Lagos, April 1988.
11. Aniekwu and Okpala (1987, 1988), see note 9.
12. Diatchavbe (1974), see note 9.
13. Ohtgbekan (1991) see note 4. Schatz (1977), see note 9.
14. FRN, Report of the Ministerial Committee on the Causes of the Excessively High Cost of Government
Contracts in Nigeria (Federal Government Press, Lagos, 1981).
Perceptions of the Constraints on Contractors’ Performance 613

15. M.A. Adeyemo, Industry: Problem and Prospects”, in Construction in


“Financing the Construction
Nigeria, Proceedingsof the 1974 Annual Conference (Nigerian Economic Society, Ibadan, 1974).
E.O. Akeredolu-Ale, The Underdevelopment of Indigenous Entrepreneurship in Nigeria (Ibadan
University Press, Ibadan, 1975). SO. Olayide, Economic Survey of Nigeria 1960-75 (Aromolaran,
Ibadan, 1976).
16. FRN (1975, 1980), see note 1.
17. P. Smith, “Nigeria: Economy”, in Africa South of the Sahara (Europa, London, 1991).
18. Aniekwu and Okpala (1987, 1988), see note 9.
19. H. Abdulahi, “Coping with Inflation in the Construction Industry in Nigeria”, Journal of Construction
in Nigeria 3, 1 (1986), pp. 9-11. F.A. Olalokun, “The Quantity Surveyor, the Second-tier Foreign
Exchange Market (SFEM) and the Construction Industry in Nigeria: Options and Challenges”, Journal
of Construction in Nigeria 4, 1 (1987), pp. 4-8. K. Wahab, “Coping with Inflation in the Construction
Industry through a Rationalisation of Building Process”, Journal of Construction in Nigeria 3, 1 (1986),
op. 13-19.
20. Aniekwu and Okpala (1987, 1988), see note 9.
21. C.P. Opara, The Need for Standardisation of Construction Plant and Equipment Used by Nigerian
Contractors, unpublished Bachelor of Env. Studies Degree Research Report, University of Lagos
(1988).
22. Aniekwu and Okpala (1987, 1988), see note 9.
23. E.K. Okoronkwo, An Analysis of Causes of Delayed Payment to the Contractor in the Construction
Industry, unpublished MSc Research Report, University of Lagos (1987).
24. Olowookere (1988) see note 11.
25. Aniekwu and Okpala (1987, 1988), see note 9.
26. Schatz (1977), see note 9.
27. Adams (1987), see note 2, Ogunpola (1968), see note 9.
28. Intermediate Technology (1970), see note 9.
29. Schatz (1977), see note 9. SO. Ogunlana, “The Critical Path Method in the Nigerian Construction
Industry”, Journal of Construction in Nigeria 4, 2 (1987) pp. 13-18.
30. 1.0. Oladapo, “Technological and Manpower Development in the Construction Industry”, in
Construction In Nigeria, Proceedings Of the 1974 Annual Conference (Nigerian Economic Society,
Ibadan, 1974).
31. C.S. Akande, “Contract System In Nigeria: Which Way Forward? A Return To Sanity”, Journal of
Construction in Nigeria 3, 1 (1987), pp. 4-7.
32. A.A. Adedipe, The Effect of Contractual Claims on the Cost of Building Projects: Comparative Study
of Indigenous and Expatriate Contractors Operations in some Selected States in Nigeria, unpublished
MSc Research Report, University of Lagos, Department of Building (1989).
33. Aniekwu and Okpala (1987, 1988), see note 9.
34. Schatz (1977). see note 9.
35. Schatz (1977), see note 9.
36. Schatz (1977), see note 9.
37. Oladapo (1974), see note 31.
38. Schatz (1977), see note 9.
39. C.M. Anekwe, “Contract Award - Nigerian Experience”, Journal of Professional Issues in Engineering
113 (1987) pp. 229-235.
40. FRN. see note 14.
41. Iyortyer (1983), see note 9.
42. ILO (1987), see note 8.
43. M. Blumer, “Sampling” and M. Ward, “Missing the Point: Sampling Methods and Types of Error
in Third World Surveys in Identifying Poverty Issues”, in M. Blumer and D.P. Warwick (eds),
Social Research in Developing Countries: Surveys and Censuses in the Third World (John Wiley,
Chichester, 1983). M. Peil, Social Science Research Methods: An African Handbook (Hodder and
Stoughton, London, 1982). J. Curran, R. Burrows and M. Evandrou, Small Business Owners and the
Self-employed in Britain: An Analysis of General Household Survey Data (Small Business Research
Trust, London, 1987).
44. Federal Office of Statistics, Report of Building and Construction Survey I980 (Federal Office of
Statistics, Lagos, 1982).
45. T.C. Dandridge and M.A. Sewall, “A Priority Analysis of the Problems of Small Business Managers”,
American Journal of Small Business 3. 2 (1978). DD. 28-36. S.G. Franklin and J.S. Goodwin. “Problems
\ ,...

of Small Business and Sources of Assistance”, Journal of Small Business Management 2i, 2 (1983),
pp. 5-12. K. Norris, Small Building Firms - their Origins, Characteristics and Development Needs
(The Chartered Institute of Building, Ascot, 1984). A. Mahmood, Educational Interests and Needs
of Owner-managers of Small Building Firms, unpublished PhD Thesis, Heriot-Watt University,
Edinburgh (1992).
46. FRN (1991), see note 3.

Вам также может понравиться