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TACKLING THE SHORTAGE OF CONSTRUCTION SKILLS IN NIGERIA
BEING A PAPER PRESENTED
BY
PROFESSOR K. T. ODUSAMI MNIQS, MRICS, MNIOB
Department of Building
University of Lagos
Akoka, Yaba
Lagos
Email: [email protected]
&
GLORIA UNOMA ENE FNIQS
Department of Quantity Surveying
Kaduna Polytechnic
Kaduna
Email: [email protected]
AT
A
2-DAY NATIONAL SEMINAR ORGANISED BY THE NIGERIAN INSTITUTE OF
QUANTITY SURVEYORS, VISION 20-2020: STRATEGIC INDUSTRY DEVELOPMENT
WITHIN NATIONAL DEVELOPMENT GOALS IN ABUJA
MARCH 22-23, 2011
1
Introduction
The construction industry plays a key role in the economy of every country contributing between 4-14%
of the GDP of both developing and developed countries. The construction sector also provides the
infrastructure that supports other sectors of the economy. In the National Implementation Plan for the
Nigerian Vision 20: 2020 covering 2011-2103 investment in construction activity is conservatively
estimated at about N 4.4 trillion. This will definitely boost construction activity and will constitute a major
challenge for the Nigerian construction sector to provide the resources required to achieve the stated
goals.
Construction skills are one of the major resource inputs into construction activity. Over time, the stock of
competent skilled construction workers has dwindled and the industry which is expected to be the
highest employer of labour after agriculture is populated with largely unskilled, inefficient and
dissatisfied workers who see work in the industry as a stopgap till “better things in the future.” Few see
their crafts as careers worth investing in.
This paper takes a critical look at the phenomenon of shortages in construction skills in Nigeria even in
the face of a massive 19.7% unemployment level (National Bureau of Statistics, 2010), its effect on the
construction industry and the national economy and recommends strategies for tackling the problem.
Overview of demand and supply of construction skills
Demand and supply of construction skills may be examined at national level, sector level, industry level,
individual organisation level or at project level. For construction skilled workers, it is most appropriate to
develop human resource plans at construction industry level for a number of reasons.
Uwakwe and Moloney (1991) describe the construction industry as being characterised by an area pool
of labour that allows movement of workers between contractors, different classes of construction and
different projects. Projects nearing completion requiring decreasing manpower needs and new projects
requiring increasing labour requirements. Contractors in need of labour hire from this area pool and
return them to the area pool when they are no longer needed.
2
Without an industry manpower plan, this area pool of labour they argue will be prone to fluctuations
between shortages and surpluses given the cyclical nature of the demand for construction products and
services. Equilibrium between demand and supply of labour requires an industry wide plan that ensures
the development of programmes that will provide adequate numbers of appropriately trained skilled
labour in the long term.
Construction firms have property rights over capital assets such as plant and machinery which they
have invested in. The same does not apply to the human capital created when they invest in training.
Firms therefore “poach” trained workers from other firms rather than train their own workforce. Because
of this market failure to train, governments must intervene through provision of financial resources and
an effective regulatory framework for the training of craftsmen. (Muya, Price and Edum-Fotwe, 2006;
Ziderman, 2001)
Any country that wishes to develop industrially requires a highly developed construction industry. The
efficiency of the industry is an aggregation of the efficiencies of the organisations within it and these in
turn rely on the knowledge, skills and attitudes of their workers and mangers acquired through
education and training. Appropriate training policies for construction skilled workers must be taken at
industry level and must involve all the stakeholders, government, construction firms and the workers
themselves.
Figure 1 is a graphical representation of the supply and demand of a certain good or service. The
supply curve represents the amount of the good or service that producers or providers are willing and
able to sell at various prices while the demand curve represents the amount of the good or service that
buyers are willing and able to purchase at various prices. The price P of a product is determined at the
point where there is an equilibrium between the price at which buyers are willing and able to pay
(demand, D) coincides with the price at which suppliers are willing to produce (supply, D) and Q is the
quantity supplied and bought at price P.
The supply-demand model shown in Figure 1 is a partial equilibrium model. The diagram shows a
positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the
product. This assumes that supply and purchasing power are inelastic. In reality, when prices go up
and income remains the same, a negative shift in demand subsequently occurs until an equilibrium
price somewhere between P1 and P2 is attained and the quantity sold drops to an equivalent level
somewhere between, Q1 and Q2.
3
If demand increases and supply remains unchanged, then it leads to higher equilibrium price and
quantity. If demand decreases and supply remains unchanged, then it leads to lower equilibrium price
and quantity. If supply increases and demand remains unchanged, then it leads to lower equilibrium
price and higher quantity. If supply decreases and demand remains unchanged, then it leads to higher
price and lower quantity.
Fig 1: Graphical representation of supply and demand
Demand and supply of constructions skills generally follow the fundamental economic concepts of
demand and supply but the complexities of manpower demand and supply and the unique nature of
construction itself must be taken into consideration.
Demand for construction skills refers to the quantity and quality of skills required to produce a required
level of construction output. This therefore means that the demand for construction skills is dependent
on demand for construction works which is cyclical, seasonal, dependent on the state of the economy
and on government fiscal policy.
Supply of construction skills refers to the various means for providing the skills demanded by the
construction industry. These include:
Providing full training for new entrants into the industry
Providing top up training for partly skilled persons in the industry
Employment of appropriately trained persons from other geographical locations
Re-skilling persons already in the industry to cope with changes in skills requirements due to
changes in technology
4
Training invariably provides the highest proportion of construction skills and this requires time and
directed effort. Another complicating factor is that employers of construction skills are reluctant to bear
the cost of training directly and would rather “poach” already trained persons from other construction
firms.
The implication is that when construction activity increases, without commensurate increase in training
in construction skills, the resulting shortage drives up wages and creates an influx of unskilled and
semiskilled persons into construction work. Even where training is increased, there is a time lag
between when training commences to when the products of training are ready for the market. As a
result of this relative inelasticity of supply in construction skills, the cost of construction goes up and the
quantity and quality of construction products come down. The increases in cost inevitably reduce
demand until an equilibrium is reached between supply and demand. By which time the damage of high
costs coupled with shoddy construction work has been done.
Shortage of Construction Skills
The skills crisis in the construction industry is not peculiar to Nigeria. Haas, Rodriguev, Glover and
Goodrum (2001) record that the USA is facing a long term labour shortage. Mackenzie, Kilpatrick and
Akintoye, (2000); Dainty, Ison and Briscoe (2005) and Agapiou, Price and McCaffer (1995) each report
on the skills shortage crisis in the UK. Syben (1998) warns of a similar situation in Germany while the
story is not different in Sri Lanka, a developing country like Nigeria (Jayawardane and Gunawardena,
1998).
United Kingdom
A CIOB (2008) skills survey clearly pointed to a shortage of skills in the UK construction industry and
the situation was expected to become worse up to 2012. Crafts and trades people were viewed as the
most difficult people to recruit, closely followed by senior and middle management. Conversely,
admin/clerical workers and labourers were viewed as the least difficult to recruit. The industry’s image
and the lack of suitable academic/vocational courses and apprenticeships were quoted as the main
reasons for this shortage.
5
Despite the current credit crunch of 2008 - 2010, the majority of UK industry experts believe that there
would be a steady increase in construction demand right up to 2020. To meet expected demand,
ConstructionSkills (2008) forecasts that 37,000 recruits are required annually from 2009 to 2013 to
boost the workforce.
Germany
The skills problem in the German construction industry is more of a shortage in quality rather than that
of quantity. Syben (1998) reports on a downward spiral in the quality of training of construction skilled
works which would inevitably lead to a change in the German construction model from one where highly
qualified construction skilled workers provide high quality, high productivity and high efficiency levels
with low supervision requirements and low unit costs to one where a larger number of less qualified
workers requiring higher levels of supervision are used.
He noted that construction firms were employing less expensive migrant workers who were also less
skilled than their German counterparts. This he predicted would result in lower quality of products that
in the long run would also cost more. In addition, the situation would get progressively worse as training
provision will decline and training efficiency will be reduced.
This prediction seems to have been justified with reports that the German economy recorded a
shortage of skills (Shafer, 2010) even in the presence of an unemployment level of up to 8.1% in 2010.
The German Economy Minister, Rainer Bruderle is reported to have told a daily newspaper,
Handelsblatt that they were considering a cash incentive to attract migrant skilled workers to Germany.
(The Local, 2010)
USA
The Construction Users Round Table (CURT) conducted a survey in 2001, which reported shortages of
skilled workers on construction projects of up to 82%. Wang, Goodrum, Haas, and Glover (2008) report
that as a result of the shortage, significant spikes in craft wages have occurred in some U.S.
geographic regions. They also report that the Construction Labor Research Council (CLRC) predicts
that 185,000 new workers need to be attracted, trained, and retained each year up to 2016 in order for
the industry to replace expected turnover and to sustain industry growth expectations. The available
data indicate that a significant shortage of skilled craft labour continues to exist in the United States and
Canada.
6
Shortage of construction skills in Nigeria
The average Nigerian construction worker is largely untrained. Training is basically unstructured and
dependent on the traditional apprentice schemes without a structured curriculum or standard method of
testing and certification. The result is that the Nigerian construction worker is accused of:
Low productivity in terms of amount of work produced per time relative to counterparts in the Western world, Asian and even in other West African countries such as Ghana.
Low-tech operations and methods resulting in much backbreaking and undignified physical labour
Low quality work resulting in unacceptable levels of material wastage during construction and high maintenance costs during the structure’s life cycle
Awe, Griffith and Stevenson (2010) note that Nigeria’s youth no longer show interest in skill acquisition
unlike the case in developed countries such as the UK where reports indicate that the demand from
young people for apprenticeships is outstripping the number of training places available in the industry.
The construction sector’s skills council was only able to place 8,500 willing people into apprenticeships
out of the 50,000 who applied. The same situation is reported in Germany where thousands of
unemployed persons are on long waiting lists for placement in training schools.
Anecdotal evidence suggests that the Nigerian construction worker is on the average less skilled, less
productive and less efficient than his counterparts from neighbouring Benin Republic or Ghana.
Construction contractors in Nigeria would rather employ a construction site worker from Ghana or Benin
Republic before considering one trained in Nigeria. This speaks loudly about the effectiveness of the
training framework for construction site workers in Nigeria.
A number of reasons have been advanced for the shortage of construction skills in Nigeria in terms of
both quality and quantity:
High attrition rate of skilled construction workers into other businesses that are perceived to be
more lucrative, such as commercial motorcycle transportation and even into crime
Low wages
Absence of a clear career path
Technical colleges and vocational training schools have become glorified secondary schools
where focus is on cognitive or theoretical knowledge and instruction in skills is de-emphasised
7
Poor funding of the practical aspects of the vocational education resulting in poorly equipped
training workshops and inadequate and poorly trained staff
Students in technical colleges see themselves as being trained to perform supervisory roles
rather than to do actual physical work
Lack of organised apprentice schemes
(Awe et al, 2010)
Awe et al (2009) note that if this trend is left unchecked, the Nigerian construction industry faces a
situation where it will have many graduates of construction related fields but an insufficient number of
craftsmen who can efficiently and effectively do actual work. This they insist will be catastrophic for the
industry and for the nation’s economy as a whole.
Implications of shortages on productivity and efficiency levels, cost, time,
quality and project success
Labour is a major component of construction work in Nigeria. Unlike in developed economies such as
the UK, USA, Germany, etc. where operations on construction sites are mechanised to a high level (as
much as 25-30% of total construction cost), construction work in Nigeria is low tech and labour
intensive. Reports indicate that labour consumes between 30 - 35% of the base cost of construction in
Nigeria.
Productivity is defined as the amount of products or services produced compared to the amount of
goods or labour used to produce it. In construction, labour productivity is better known as labour output
and is measured as the amount of work done over a period of time. Olomolaiye and Ogunlana (1989)
observed that the production outputs in key building trades in Nigeria were lower than they ought to be.
Reasons for this were linked to inefficient methods, lack of appropriate tools and poor supervision
training. This agrees with a study carried out by Alinaitwe, Mwakali & Hansson (2007) which ranked
incompetent supervisors and lack of skills of the workers as the two most significant causes of low
productivity of construction workers in developing countries.
These problems can be directly linked to poor and inadequate training of construction skilled workers.
With shortages in supply of skilled workers, there is that tendency for unskilled workmen to be attracted
to and employed by the construction industry. A labourer on site works with a mason for a few months
then purchases a trowel and hires himself out as a qualified mason. Tests and certification are not
8
required. He goes on to a construction site and repeats the inefficient processes learnt from observing
equally untrained mentors and the cycle of low productivity and poor workmanship continues.
Efficiency is the degree to which something is done well or without wasted energy. The presence of
many poorly trained and inexperienced workers on construction sites in Nigeria are among the most
significant causes of shoddy construction and waste of time and materials on construction sites in
Nigeria. For instance, when a mason does not lay his blocks straight remedial work has to be done,
wasting time and materials. In addition more mortar than necessary will be required while rendering to
straighten the walls and to form the openings. A lot more time is spent doing this for which he will have
to be paid. An inexperienced tiler will use more tiles than required to do a piece of work since much of it
will be trashed as avoidable waste.
Avoidable waste of materials and time on construction sites has been estimated to be between 2-5% of
total construction cost. When this percentage is applied to the huge amounts involved in construction
work, the enormity of the problem becomes clearer. For instance if these percentages are applied to
the Federal Government of Nigeria’s planned expenditure of N 4.46 trillion on construction projects from
2011 - 2013, then it is likely that between N 89.2 – N 223 billion will be lost as waste that could be
avoided by working with better trained construction workers. The country and the industry would fare
better by spending a percentage of these amounts in training and retraining of construction skilled
workers and supervisors.
The unsavoury effects of using poorly skilled workmen are not limited to initial construction. Some of
those effects begin to manifest themselves when the structures are already in use. Poorly hung doors
that do not shut, wall tiles that collapse, uneven road surfaces that do not adequately drain water and
therefore form potholes, sagging beams that lead to collapse of buildings and bridges, drains that are
not properly linked, poorly routed water and drain pipes, uneven steps that cause accidents, etc. The
list is endless. Maintenance costs tend to go up with shoddy construction and the use of poor quality
materials. Many end users of construction products in Nigeria have to contend with structures that are
not user friendly and do not meet with international or even national standards and a significant portion
of the blame must go to the shortage of construction skilled workers and supervisors in the country.
9
Criteria for project success are considered to be:
Cost: A project is considered successful in this area if final cost of construction does not
exceed budgeted amounts
Time: A successful project should have been constructed within the agreed project duration
Quality: A successful project has to meet the design specifications in terms of material quality
and levels of workmanship which in turn must meet national and international
standards
Function: A project is not considered successful if it does not fulfil the function for which it was
conceived and constructed and if it does not meet the requirements of the end user
A large number of construction projects in Nigeria fall short of the above criteria in two or more areas
and by definition are failed projects. Low productivity and inefficiency of construction workers take some
of the blame for failures to meet criteria for project success.
Socio-economic Issues
Employment
The employment level in a nation is a key economic indicator. Employed persons by definition comprise
all persons above a specific age who during a specified brief period were in paid employment or in self
employment. A high unemployment level is an indication that the economy of a country has gone bad. It
is also positively correlated to many societal ills such as poverty, high crime rate, high mortality rates,
low life expectancy, etc.
Unemployment in Nigeria was put at the very high rate of 19.7% in March 2009 (National Bureau of
Statistics). High unemployment rates correlate positively with poverty, crime, mortality and low life
expectancy levels in the country. Governments of countries try to create jobs by investing in sectors of
the economy that are labour intensive and at the same time add value to economic activity. Most
governments find that the construction industry fits the bill because all over the world, despite
technological advances, construction activity remains labour intensive. In developing countries where
construction activity is still relatively low-tech, labour requirements for construction are even greater. In
addition to its job creation potential, construction adds value to the economy by providing the
infrastructure required by other sectors of the economy for growth and development.
10
Table 1 below shows the average annual percentage of employed persons in various countries who are
employed in the construction industry.
Table 1: Average annual percentage of total employed persons working in construction by country (ILO)
Country Average of Annual Percentage of Total Employed Persons
Working in Construction
United Arab Emirate 21.97
Malaysia 9.10
Egypt 8.28
United States of America 7.80
United Kingdom 7.60
Morocco 7.52
Germany 7.29
South Africa 6.83
China 5.00
Nigeria 1.62
Source: Based on labour statistics published in Laborsta Internet the official website of the
International Labour Organisation (ILO)
Table 2: Average annual percentage of total employed persons working in construction in Nigeria
(NBS)
YEAR TOTAL NUMBER OF PERSONS
EMPLOYED IN CONSTRUCTION
TOTAL NUMBER OF PERSONS IN EMPLOYMENT
PERCENTAGE OF TOTAL EMPLOYED PERSONS WORKING
IN CONSTRUCTION
2003 260,000 46,800,000 0.56
2004 267,150 47,993,400 0.56
2005 273,049 49,486,362 0.55
2006 288,723 52,326,923 0.55
2007 329,583 54,030,000 0.61
AVERAGE 0.57
Table 2 shows annual percentages based on labour statistics for Nigeria published by the National
Bureau of Statistics. The difference between the published figures from the ILO and the Nigerian
National Bureau of Statistics are probably because the Bureau of Statistics uses more stringent criteria
for defining persons who are employed.
11
Either way, the percentage of persons employed in construction in Nigeria falls way below what obtains
in other countries. Fig 2, 3 and 4 below compares the trends in employment in construction for various
countries with Nigeria using ILO published statistics available from 1999 to 2008.
Fig 2: Trends in employment in construction in selected Africa countries including Nigeria using ILO
labour statistics
Fig 3: Trends in employment in construction in selected developed countries in the Western World
and Nigeria using ILO labour statistics
0.00
2.00
4.00
6.00
8.00
10.00
12.00
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08
EGYPT
MOROCCO
SOUTH AFRICA
NIGERIA
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08
UNITED KINGDOM
GERMANY
USA
NIGERIA
12
Fig 4: Trends in employment in construction in some selected developing countries in Asia and the
Middle East and Nigeria using ILO labour statistics
The significantly low figures for Nigeria suggest the following:
Construction output in the country is very low compared to other countries
The shortage of construction skilled workers in Nigeria is more critical than in it is in other
countries
The Nigerian construction industry is grossly underdeveloped
Successive governments in the country have not recognised the potential of the construction
industry to create employment and to improve GDP
Cost of Construction
Given the low skill levels and low productivity levels of the average construction worker, huge sums of
money spent on construction can only result in low construction output not only in terms of quantity but
also in terms of quality. In other words, the Nigerian construction industry currently does not provide
value for monies invested in it.
In May, 2010, the Minister for Communication, Mr. Laran Maku, while addressing journalists after a
Federal Executive Council meeting said, “The FEC has noted that in spite of all the processes that we
have gone through so far, including the Due Process and reforms, the cost of construction in Nigeria is
relatively higher than in most other countries, even within the sub-region and other parts of the world.”
The percentage was put at between 20-30% higher than in neighbouring countries but anecdotal
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08
CHINA
UAE
MALAYSIA
NIGERIA
13
evidence suggests that the actual percentage is much higher than that for government projects at
federal, state and local government levels.
A significant proportion of the huge sums of funds channelled by government into construction does not
go into actual construction itself. This is caused by lack of proper budgeting procedures for construction
work, lack of proper procurement processes and lack of proper framework for technical contract
auditing processes (NIQS, 2011). The proportion of it that is spent on actual construction does not
produce the required results because the basic inputs are expensive and of low quality and also
because of poor and inadequate supervision.
Capital flight
The government of Nigeria and contractors in Nigeria respond to these problems by engaging
international construction and management skills without making any effort to put in place a programme
for developing indigenous capacity to gradually take over a larger proportion of the work.
Today, construction sites and component factories are awash with migrant workers from Ghana, Togo,
and Benin Republic. Many component manufacturing firms are populated with skilled workmen form
neighbouring countries and from as far as China. As a local contractor interviewed put it, “even though
they charge higher rates, you are sure they will do a good job and finish it in good time”. The procedure
appears to be that once a contractor has estimated his requirements for skilled workers for a project, he
puts in a request to one of the many agents that source migrant workers. The contractor provides
accommodation for them on or close to the site for a fixed duration during which they work to complete
the project. On completion most of them return to their countries where their families reside.
A large proportion of the wages and fees they earn in Nigeria is repatriated to their home countries.
These are wages that unemployed persons in Nigeria could have earned if they were adequately
trained for the jobs. The amounts in question may seem of low significance now, but considering the
intention of government to channel trillions of Naira into physical infrastructure development, the
aggregate amounts could become very significant if deliberate efforts are not made to develop local
human capacity.
Assessment of future requirements
The demand for construction skills in Nigeria currently outstrips the available supply. The situation will
get worse if nothing is done considering the amount of investment in construction as envisaged by
14
government in the draft Vision 20:2020 document. This section attempts to assess the future
requirements for construction skills from 2011 to 2013 for Federal Government planned expenditure on
construction. Table 3 below shows the planned investment in Federal Government construction
projects in Nigeria between 2011 and 2013.
Table 3: Federal Government of Nigeria planned expenditure on construction from 2011-2013
THEMATIC AREA
PLANNED TOTAL SUM N
Power 880,978,010,000.00
Transport (roads, railways, airport & ports) 2,427,519,410,000.00
Housing 250,500,000,000.00
Agriculture (silos, warehousing, irrigation) 162,817,520,000.00
Gas plants & pipelines 541,793,940,000.00
Mineral resources (laboratories & auditorium) 485,410,000.00
Education (classrooms) 53,751,810,000.00
Labour & productivity (training centres) 15,033,000.00
Youth development (youth development centres) 12,568,340,000.00
Governance, security & general administration 18,194,900,000.00
FCT 521,029,600.00
Niger Delta 97,050,520,000.00
Environment 21,432,100,000.00
GRAND TOTAL
4,467,628,022,600.00
Source: Figures extracted from Draft Nigeria Vision 20:2020, First National Implementation
Plan (2011 – 2013), Sectoral Plans and Programmes Volumes II & III (2010)
Methodology
The planned investment on construction work was extracted from the draft Nigeria Vision 20:2020
document. Only priority projects clearly defined as construction, renovation, rehabilitation or
maintenance of physical structures were included.
A lack of published labour statistics in Nigeria limits the use of existing models in calculating skilled
labour requirements for the planned investment. For the purposes of this study, skilled trades by
construction types as percentages of total construction costs in the United States of America published
by McGraw Hill Research and Analytics are adjusted to take care of differences in labour utilisation and
mechanisation levels between the USA and Nigeria. The adjustment upwards of 15 % was based on a
survey carried out of the opinions of selected professionals in the Nigerian construction industry. The
cost of skilled labour for the planned investment is calculated and reduced to skilled labour days
15
required using published labour rates in Nigeria. Numbers of skilled workers required are calculated
based on a 261 labour days annually (NJIC, 2005).
Table 5 shows percentage of total costs of construction allocated to skilled trades by construction types
in the USA and adjusted for Nigeria.
Table 5: Percentage of total costs of construction allocated to skilled trades by construction
types
CONSTRUCTION TYPE
SKILLED WORKERS US %AGE
SKILLED WORKERS NIGERIA %AGE
Stores 17.5 20.13
Offices 19.3 22.20
Schools 18.3 21.05
Hospitals 17.7 20.36
Highways 16.9 19.44
Water supply 16.0 18.40
Total (All types) 13.9 15.99
Source: Extracted from Gentile (2007)
Table 6 shows the stage by stage calculation of the number of skilled workers required to achieve the
planned investment by the Federal Government from 2011 to 2013. The required number of 1,610,739
implies that 536,913 additional skilled workers need to be recruited annually into the industry for the
period for the planned investment. This figure does not include skilled worker requirements for planned
investment in construction by State Governments, Local Governments and .the Private Sector.
16
Table: Number of skilled workers required to achieve the Federal Government’s planned investment in construction from 2011 - 2013
Construction Category
Total Cost of Category (N)
Skilled Workers Percentage of Total
Construction (%)
Cost of Skilled Workers by Category
(N)
Skilled Worker Days
(Number)
Skilled Worker Years
(Number)
A
Power
880,978,010,000.00 15.99 140,868,383,799.00 70,434,192 269,863
B Transport (roads, railways, airport & ports)
2,427,519,410,000.00 19.44 471,909,773,304.00 235,954,887 904,042
C Housing
250,500,000,000.00 22.20 55,611,000,000.00 27,805,500 106,534
D Agriculture (silos, warehousing, irrigation)
162,817,520,000.00 18.40 29,958,423,680.00 14,979,212 57,392
E Gas plants & pipelines
541,793,940,000.00 19.44 105,324,741,936.00 52,662,371 201,772
F Mineral resources (laboratories & auditorium)
485,410,000.00 21.05 102,178,805.00 51,089 196
G Education (classrooms)
53,751,810,000.00 21.05 11,314,756,005.00 5,657,378 21,676
H Labour & productivity (training centres)
15,033,000.00 18.40 2,766,072.00 1,383 5
J Youth development (youth development centres)
12,568,340,000.00 21.05 2,645,635,570.00 1,322,818 5,068
K Governance, security & general administration
18,194,900,000.00 22.20 4,039,267,800.00 2,019,634 7,738
L FCT
521,029,600.00 15.99 83,312,633.04 41,656 160
M Niger Delta
97,050,520,000.00 15.99 15,518,378,148.00 7,759,189 29,729
N Environment
21,432,100,000.00 15.99 3,426,992,790.00 1,713,496 6,565
4,467,628,022,600.00
840,805,610,542.04 420,402,805 1,610,739
17
Strategies for Meeting Future Requirements
The Nigerian construction industry currently operates under a shortage of qualified skilled workers with the
attendant consequences. Education and training of new entrants into the industry and top up training for the
semi skilled workers already in the industry are the main strategies adopted in bridging the gap between the
demand and supply of construction skills particularly in developing countries (Kumaraswamy, 1997;
Jayawardane and Gunawardena, 1998; Muya, Price and Edum-Fotwe, 2006vm). This also has the added
benefits of reducing unemployment levels and increasing the contribution of the construction industry to the
Gross Domestic Product, GDP.
In arranging for training provision due consideration must be given to the following:
Nature of training
This defines the training structure, type of training, curricula and other broad training policies to be employed.
The “dual” system of training used in Germany, Netherlands and other European countries has been identified
to produce the best results in terms of productivity and efficiency. The dual system involves the aspect of
developing the capabilities of the trainees for a life-long career in construction and takes place in the classroom
and the other aspect of imparting practical skills which are broader in scope than the traditional skills (Clarke
and Wall, 1998; Clarke, 2010). This dual system has been used successfully in Benin Republic (Walther, 2006)
Defining the training system should be by a collaborative agreement between the government, the construction
industry, trade unions and training institutions.
Entrants to the programmes
Entrants into the programmes need to have the basic reading and numeracy skills. In the UK today, IT is also
considered a basic skill. In the Nigerian context minimum educational qualification is the Junior Secondary
Certificate of Education
Training providers
Formal training providers of construction skills in Nigeria today are polytechnics, technical schools, and
vocational schools. Informal training is provided by apprenticeships and the school of life. Training provision in
Nigeria needs to be better structured and regulated. Institutions providing training need to be better equipped
and better staffed with properly trained personnel.
18
Location of training Location of training should be appropriately divided between classroom and site. Classroom training could be
made flexible for partly trained workers already working on construction sites so they can attend classes in the
evenings or at weekends.
Duration of training
Duration for training should not be less than 3 years. This will adequately prepare the trainees for life-long
careers in the construction industry.
Funding of training
Funding of training in construction is an expensive enterprise and is usually taken care of at three levels
1. Government
Muya et al (2006) justifies state funding and regulation of training with the following arguments:
The benefits of training that accrue to society exceed the private benefits realised by trainees and firms.
Provision of a certain skill will promote the development of an industry that is strategic in the overall
growth of the economy
Firms are reluctant to train people who they do not have property rights over and who may be poached
by other firms. Governments therefore have to intervene with regulation to compel firms to contribute to
training
When left with the private sector, the training system has been riddled with imperfections and
inadequacies
Without government financing and regulation, the training needs of disadvantaged people in society will
not be met. For these groups of people, training is an important tool for improving their employability,
incomes and standards of living
Government budgets are therefore usually the main source of technical and vocational education and training
(TVET) in the formal sector particularly at pre-employment levels Employers and workers however also have a
role to play and are expected in many cases to complement government funding in order to improve training
results.
19
Construction firms
Industrial firms in many parts of the world pay a levy to a central training fund in the country in which the firm
operates. The levy is usually calculated as a percentage of payrolls. There are various national payroll tax
schemes for funding of training but most fall within two main classes. There are revenue generation schemes
where the proceeds are used to finance training in government or public institutions and levy-grant schemes
which finance in-service training within the industrial firms. In Nigeria we have the Industrial Training Fund (ITF)
and the Education Training Fund (ETF).
In the UK, levies on construction firms are collected by CITB and administered through ConstructionSkills.
Percentages of payroll in the UK range between 0.25%-0.29% for contractors and 2%-2.28% for labour-only
contractors. Funding from government is roughly in the ratio of 30:70 of industry levies.
In The Netherlands, government funding ratio is the same as in the UK, but levies on firms’ payrolls are a lot
higher amounting to a total of 4.3% with 3.5% for new entrant training and 0.8% for continuing training of adult
workers.. The Netherlands government also offers a tax-relief incentive to companies involved in training.
In Germany firms pay between 2% - 2.8% of their payroll annually for training of construction workers but are
refunded up to 50% of the amounts paid if the firm is involved in training, mainly to cover the cost of lost
production time. (Clarke et al, 1998; Agapiou, 1998; Dainty, Ison & Briscoe, 2005)
Muya et al (2006) report that formal construction craft skills training in Zambia has been inadequately funded
over the years and that construction skills employers had hitherto not been compelled to contribute funds to
construction skills training but that the regulatory body TEVETA had plans to create a national training fund with
2% levy on employers’ payrolls.
User Fees
There is this argument that trainees or students should finance the full cost of their training since they will be the
full beneficiaries as they can expect higher wages due to the post-training value of the skills acquired. In
principle, this argument is valid, in reality however, entrants to these training programmes cannot afford the cost
of training or do not see the benefit in their investing that much over a 2-3 year period before they can expect to
get returns on their investment.
Muya et al (2006) report that in Zambia, training institutions were only able to raise about 30-40% of their
budgets from user fees. User fees were found not to be an adequate finance bridging measure.
20
Most countries therefore adopt cost sharing schemes where some level of user fees are paid by trainees or
students to complement public fund allocations to training institutions.
(Ziderman 2001, Muya et al 2006)
Regulation of training and certification
Currently in Nigeria, training provision is mostly unregulated. Certification of skills is done at state government
level where the relevant ministry is supposed to test and award certificates at Grade I, II and III levels. Tests are
hardly ever carried out and certificates are obtained by filling forms and paying specified fees.
Tests need to be standardised and regulated across the country to ensure that workers employed on
construction sites actually have the skills they are certified for.
Regulatory Body
There ought to be a national regulatory body responsible for the training of construction skills in Nigeria.
Strategic training plans have to be formulated within a national training policy for the construction industry which
needs to be industry wide and national in scope. Recruitment and training of construction skilled workers
because of the unique nature of the construction industry and its products should not be lumped together with
every other vocational skill. This could be the reason for the low patronage of construction training by job
seekers in Nigeria.
The United Kingdom which considers construction as one of its largest exports has a Construction Industry
Training Board (CITB) which was established in 1964. In 2003 the CITB in partnership with the Construction
Industry Council (CIC) formed “ConstructionSkills” which today is the Sector Skills Council for the construction
industry in the UK.
Sector Skills Councils (SSCs) are state-sponsored, employer-led organisations that cover specific economic
sectors in the United Kingdom. They have four key goals:
to reduce skills gaps and shortages
to improve productivity
to boost the skills of their sector workforces
to improve learning supply.
21
ConstructionSkills has the responsibility for arranging for the provision, approval and funding of the training of
skilled workers in the UK construction industry. It is a collaborative effort between government and industry.
Other economies such as South Australia and Hong Kong have regulatory bodies that have the sole
responsibility for arranging for the provision, approval and funding of the education and training of construction
workers. Other countries such as Malaysia, South Africa, and Mauritius have these functions embedded in the
functions of their Construction Industry Development Boards.
Conclusions
The construction industry is a key driver of the development and growth of any country because it provides the
physical infrastructure required by every sector of the economy for productivity. The construction sector also is
a massive employer of labour because many of its processes remain labour intensive. Construction skilled
workers are a major resource for construction output and the provision of this resource must be given adequate
attention.
There is currently a severe shortage of skilled construction workers in Nigeria and this has resulted in the
employment of semi skilled and unskilled persons on construction sites resulting in low productivity, inefficiency
in terms of cost and time, and poor quality of finished products. In addition, there has been an influx of migrant
workers and international construction skills to take on jobs which unemployed Nigerians could have done if
they were adequately trained. Capital flight is also a consequence of the employment of a large number of
foreigners in any economy.
This situation will reach crises levels if nothing is done given the planned massive investment in construction by
government for the achievement of Vision 20: 2020. It is estimated that at least 536,000 new entrants need to
be recruited and trained annually from 2011 to 2013 to meet the demand that the planned investment will
create. There is also a need to re-train many of those already employed in the industry. These figures are
conservative because only planned investment by the Federal Government was used in the analysis. Planned
expenditure by State and Local Governments as well as the private sector were not used in the calculations.
Shortage of construction skills is not peculiar to Nigeria as it is a major concern in other countries both
developed and developing. What is peculiar is that in Nigeria nothing is being done about it. The government is
making the right plans for providing finance for construction but seems to ignore the other factors of production
such as labour, materials, plant and management skills. The solution to import most or all of these does not
make economic sense in the short, medium and long term. There must be a concerted effort to develop these
22
capacities locally and this must be a collaborative effort between government and industry. For construction
skilled workers, these efforts should have started three years ago as it takes that long to fully educate and train
a construction skilled worker.
The training of construction skilled workers should be taken at industry level because of the casual nature of
labour employment in the Nigerian construction industry. Funding of training for construction skills should be
borne by government, construction firms and user fees according to a ratio agreed by government, construction
firms, trade unions and training institutions. The government however is expected to provide the major share of
the required funds for the reasons stated below.
The benefits of training that accrue to society exceed the private benefits realised by trainees and firms.
Development of the construction industry is strategic in the overall growth of the economy; firms are reluctant to
train people who they do not have property rights over and who may be poached by other firms. Governments
therefore have to intervene with regulation to compel firms to contribute to training. When left with the private
sector, the training system has been riddled with imperfections and inadequacies; without government financing
and regulation, the training needs of disadvantaged people in society will not be met. For these groups of
people, training is an important tool for improving their employability, incomes and standards of living.
Recommendations
1. Government and industry must set about revising the National Construction Policy which remains
largely unimplemented. The policy should embed a national training policy for skilled construction
workers
2. The government and all industry stakeholders in partnership should establish a body whose main
function is to drive the national construction policy to strategically develop all aspects of the Nigerian
construction industry.
3. Due to the near crises situation existing in the supply of construction skills, a Construction Skills Council
should by established in partnership with the construction industry and training providers that will work
within the framework of the national construction policy whose main functions will be to:
Keep track of levels of supply and demand of construction skills
Implement measures to reduces skill gaps and shortages
Arrange for the provision, accreditation, regulation and funding of training of construction skills
Boost the productivity of the construction sector workforce
To improve the learning supply for the construction sector workforce
23
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