The Federation of Construction Industry (FOCI) has urged the federal government to conduct a thorough review of existing contract templates and procurement guidelines. This review aims to incorporate flexible provisions that can address the inflationary impacts on materials costs within construction projects. FOCI highlighted the significant inflation of construction materials, including cement, steel, gravel, and asphalt, which has considerably escalated project costs. This surge in costs has made projects financially unfeasible for both public and private stakeholders.

FOCI President, Chief Vincent Barrah, addressed a press conference in Abuja on Thursday, expressing concern over the soaring prices of construction materials. He emphasized that the exorbitant inflation, coupled with skyrocketing diesel prices, has intensified the financial burden on construction companies. The increased costs have further strained the already precarious financial situation of these companies, hindering their operations.

Barrah noted that the current exchange rate has doubled the cost of spare parts, making it challenging for companies to expand or replace their machinery. He underscored the vital role of the construction industry in driving economic growth, creating employment opportunities, and enhancing the quality of life for citizens. However, he lamented that the current economic climate, characterized by soaring inflation rates, has posed significant challenges to the industry.

The consequences of these inflationary pressures extend beyond the construction sector, affecting the broader economy and impeding Nigeria's overall development trajectory. Construction projects are experiencing unprecedented delays and disruptions due to struggles in procuring essential materials within budgetary constraints.

FOCI emphasized the inadequacy of existing contract provisions to cater to fluctuations in material costs during project execution. Predetermined price adjustments stipulated in contracts are no longer sufficient to offset substantial increases in material prices. This situation leaves contractors with no choice but to absorb the additional costs or seek renegotiation of contracts, both of which pose significant challenges and implications for project delivery.

FOCI also called for strengthened monitoring and reporting mechanisms to track changes in material prices and assess their impact on project costs in real-time. Additionally, they advocated for enhanced financial support mechanisms, such as access to low-interest loans and grants, to mitigate the financial strain caused by inflation and facilitate project continuity.

Comprehensive policy reforms were deemed necessary to address structural issues contributing to inflationary pressures in the construction sector. These reforms should target supply chain bottlenecks, regulatory barriers, and market distortions to create a conducive environment for sustainable growth and development in the construction industry.

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