With building industry battered by harsh economic policies as experienced in the country last year coupled with its gradual recovery after the nation’s exit from recession, experts in the sector have called for government action for establishment of construction bank, implementation of regulatory laws that will aid its full revitalisation.
In recent past, high interest rate coupled with short term payment mode by financial institutions has been a major concern for developers with agitation for a way out.
Developers have since seen relying heavily on the support of Deposit Money Banks (DMB) which is still yet far from offering attractive soft loan.
Construction Bank if established will provide a low interest rate for developers and also give room for a long term payment.
In his prospect for the upcoming new year, the immediate past president of Association of Town Planner Consultant Association of Nigeria (ATOPCON), Tpl.Olaiya Afolabi, said establishment of construction bank must be given attention by the government in the new year. He said if government can put it in place and well implemented it will aid development and sustainability of the sector while also serving as an encouragement for both local and foreign investors.
“Just as government is intervening in Agriculture and foreign exchange, government should also look into the building industry, because this industry is one industry that affects the generality of the circulation, sizeable number of the populate are indulged in construction activities, construction industry is such that can have multiplier effect on the economy.
Over the years the construction industry have been badly affected by interest rate, most of the banks in Nigeria are not set up for construction activities, construction work is long time in nature compared to other economic sectors that are short term in nature, so by long term nature of construction industry, you can’t use short term loan to finance long time project. The short term loan we are having in the country, the interest rate is high which can not support construction activities, so we are for establishment of construction bank for construction sector this year.
Construction industry can contribute much to the development of a nation, so something like this must be addressed this year”.
He said regulatory law should also be given priority by implementing and enforcing building code law.
“We need to look into our regulatory laws, the building code , the land use act, we need to implement the areas that are good in the law for the betterment of our country. Though work is in progress on that building code but there’s need to put pressure on the government in order to ensure its implementation in the new year”
In the same vein, the first Vice President of Nigerian Institute of Builders, Builder Kunle Awobodu urged government to ensure establishment of construction bank that will serve as a financial strength for developers in the sector.
He said its establishment will help in creating a flexible loan for investors and also propel more action from both foreign and domestic contractors.
“We have been agitating for construction bank for a very long time, this is because it will give room for acceptable long term and the interest rate will be low”.
He likewise called on government to fast track the enforcement of regulatory law that will put an end to building collapse and encourage engagement of qualified hands in the sector.
“Building code law must be implemented because this will help in curbing building collapse, engagement of professionals and professionalism”
A Building code is a collection of laws, regulations and ordinances or other statutory requirements adopted by government or legislative authority, involved with the physical structure and welfare of building occupants. Building Code establishes consistent minimum standards for the quality and durability of construction materials and building systems.
It also embraces all aspects of building construction including fire and life safety issues, structural design, security, mechanical, electrical and plumbing systems minimum air quality, energy conservation and accessibility.