THE Federation of Construction Industry (FOCI), which represents key stakeholders in the construction industry, lamented yesterday that the rising cost of diesel and power, as well as taxation, are destroying the industry.
The problem is further complicated, according to the Federation, which is made up of contractors and consultants, by the 5% variation of pricing (VOPs) in ongoing projects. They claimed that, given the present rate of inflation, the range is impractical.
They warned that construction firms may be compelled to lay off workers, worsening the country’s unemployment situation.
He said: ” The purpose of this meeting is to identify challenges facing the sector and find ways to engage the Federal government to get the problems solved. We also want to engage the National Assembly on the issue of taxation so that in the drafting of the 2023 Finance Act, they would consider the sector.
“The way the taxation system has been structured, you find out that the players pay more than what is stipulated. Up to about early this year, I used to buy diesel at about N400 per litre, but now it is over N700 and this additional cost mean that your profit has been reduced…
“Nigeria has been losing about 90 per cent of revenue that is supposed to form a cash backing for the budget. If we are not able to stem the loss in oil production that will affect the cash that will be available to finance the budget. We have in the past one month had challenges with power, and without power, there will be no production.
“If government can find a cash backing for the budget, it will impact the construction industry and other sectors. To attract private investment to the construction sector, the environment has to be conducive, in terms of taxation and access to credits.”
Nasiru Dantata, the President of FOCI, also spoke, saying that the recent inflationary trend has become a major source of concern for members, noting that the cost of essential materials increased by several points between January and March 2022, compared to the beginning of the year.
