N600bn debts kicking construction firms into recession

Construction companies in the country may be sliding into recession, as many have had to lay off staff, and work at about 30 per cent of their capacity due to nonpayment for jobs they have carried out for government at all levels.

Federation of Construction Industry (FOCI), the umbrella body of building and civil engineering contractors, sub-contractors, and plant and equipment suppliers in the country raised concerns on Tuesday, over the huge debts which it said is over N600 billion, with the Federal Government alone accounting for about N600 billion of the debts.

President of FOCI, Mr. Solomon Ogunbusola, who raised the alarm at 59th Annual General Meeting of the body, in Abuja said ex-President Goodluck Jonathan gave the construction industry so much work to do without money to execute them.

Said he: “We are not finding it funny; the bigger ones and smaller ones are finding it extremely difficult. In the construction industry, we are working below 30 percent capacity.

“If you are living in Abuja, for example, at the early hours of 4,5 and 6 a.m, you would see trucks of construction companies coming into Abuja because the workers will have to resume but now you don’t see the trucks including Julius Berger, Stabilini etc coming in.”

“Some of us have closed; we closed the company. We are only resuming in the office for the purpose of continuity and I want my message to be brought out clear as I am saying, we can’t hide it. It is unfortunate that the construction company can’t go and carry placards and start going around saying ‘we are in recession.’ If it is something we can do, we would have done it long ago.

“The Federal Government owes the construction industry over N600 biilion. I can mention three companies that the government alone owes over N200 billion: Julius Berger, N70bn; MCC, over N70bn; Setraco, over N80bn.  Those are the ones I am sure of the exact figures even S&M which is a growing company is being owed over N800m.

“We have never had it so bad like in the last two years because the payments were not coming forth and because we don’t know what to do, we have to just cry aloud.”

Ogunbusola, who was apparently concerned about the present state of association’s members, said FOCI’s 126 registered member companies are utilising less than 30 per cent of their staff strength due to mass retrenchment.

“We wish to bring to the notice of President Muhammadu Buhari; Senate President Senator Olusola Saraki and House of Representatives Speaker, Yusuf Dogara that the construction companies generally are working at 30 per cent capacity following the mass retrenchment of our workers due to the delay/non-payment of certified jobs by various arms of government.”

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