Identifying The Risks Of Nigerian Projects Construction Essay


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Nigeria is being classified among the under-developed /developing nations in the world and as such, a strategy was published of the country's government of becoming among the twenty most developed nations in the world by the year 2020. This report focuses on the construction project sector of the country; seeking to identify the cause of project failures and poor project deliveries on time, cost and quality specification by the project stakeholders which caused past failures to the construction sector and will impede the achievement of the vision successfully.

Research findings revealed that the problem in the Nigeria construction project sector is due to poor competency of the construction project stakeholders on risk management and its process; poor understanding why projects are being undertaken and , no drive for sustainability of completed project due to the stakeholders high interest in delivering the project on time('money conscious') . These problems are contributed by all the key project stakeholders mostly at the execution phase of the project life cycle where the build up takes place. To resolve these risks, a triangulation (mixed) method of researching was used to carry out this report. A case study using secondary research studied a well to do UK Construction Company while a questionnaire is designed with the strategy of identifying the maturity/competency state of Nigeria construction project stakeholders while a correlation method will be used to compare the risk management process of Nigeria and the United Kingdom. With the gap identified and resolved on time, Nigeria will be classified among developed nations.

Construction projects like other types of projects does not occur on its own but, it is being carried out, handled and influenced by stakeholders particular to that project. It is perceived to have high level of risk due to the involvement of contractual parties such as the suppliers, owners, contractors, subcontractors, designers (El-Sayegh, 2007). The roles of stakeholders in a project can contribute positively or negatively towards the success of the project. Stakeholders who are negative (or against) to the project can influence the project in a negative way, which will pose some level of risk to the project. But stakeholders whither positive or negative towards the project can to some extent be the source of risk in a project or alternatively affected by the resultant effect of risk associated to the project activities. It is therefore important to understand the meaning of risk due to the fact that this report primarily focuses on the subject risk management. Risk is defined as events which are likely to affect the ability of a project to achieve its defined objectives (Westland, 2006). All projects are inherently risky when carried out (APMBOK, 2006) construction projects not excluding from the list.

However, the different risk associated with projects as such has the tendency of either affecting the smooth completion of the project on time, cost and quality specification or on the other hand, affects the completed project during the benefit realisation phase (after the project has been completed).

Construction projects are accompanied with different characteristic processes and associated risk but these characteristics varies with regions and locations to which the construction project is being executed (Zhi,1995). Irrespective of the country, locality or region, construction projects are usually risky due to variability of construction practices being upheld in such region.

As it relates to Nigeria, the risks associated with the construction projects (industry) are very numerous leading to cost and time overruns as well as developmental retardation of the country in general. Therefore, this report will seek to identify the main risks Nigeria key construction project stakeholders contributes to project failures and the not deliveries of project on time, cost and quality specifications and also, a recommendation will be given on how the risk can be effectively managed.

1.1 Project Aim

Identification of the Key risks being experienced by the Nigeria construction projects by its key stakeholders which has caused failures in project deliveries and poor development to the entire country.

1.2 Objective

1. Vivid identification of the prevailing stakeholder's caused risks associated to the Nigeria construction project.

2. Give a proposal for verifying the credibility of the identified risks with a comparison of the risk management process being practiced by a well to do international construction company projects abroad with the aid of a case study.

3. Give a recommendation for the effective management of the identified risk so as for rapid development to begin to take place in Nigeria where by projects will be completed on time ,cost and quality specification required by the associated stakeholders as related to the project

1.3 Project Rationale

1.3.1 Personal Rationale

The word risk has not been better understood by people and even when understood, it has not been effectively managed and therefore, leading to failures and unforeseen circumstances being experienced on projects and business as usual activities.

From literature reviews, it has come to the notice that there is high interest in risk management and as such, various risk related reports has been published on different countries such as construction risks reports on UAE (El-sayegh, 2008), Indonesia (ANDI,2006), USA(Kangari,1995), China (Fang, Fong, and Shen,2004), Hong Kong(Ahmed, Ahmad, and Saram,1999).

It is however noticeable that risk management as it relates Nigeria has not been given concrete attention. This has contributed to the failure of projects and some projects not being delivered in conformance to the specification required by the federal government. This has led to the retardation and slow development on the entire Nigeria infrastructure and sectors. Due to this reason, the country has come out with a visionary statement published by the Concept for Nigeria's vision (2008) as "By 2020 Nigeria will be one of the twenty largest economies in the world able to consolidate its leadership role in Africa and establish itself as a significant player in the global economic and political arena". This report believes that the risk that has led to the slow or poor development of Nigeria and the construction sector specifically was caused by the stakeholders involved in the projects. Therefore, it is best for the risk relating to projects stakeholders to be identified proactively and eradicated so as for the vision of the country to be achieved sustainably.

Business Rational

About 50-60% of the capital investment in developing countries goes to construction related activities and projects (Dharwardker ,1979) and this not effectively managed usually results in the waste of the allocated investment on such projects. A report according to the planning committee on national construction policy (1989) explained that the Nigeria construction projects during the 1980's contributed about 70% of the Gross domestic product (GDP) of the country and, contributed immensely to the overall country's development during that period. Unfortunately, by 2004, the GDP of Nigeria on construction projects has decreased to 1% which was primarily as a result of various factors ranging from poor performance to unidentified causes (AfDB/OECD, 2006).

Also, with the vision of Nigeria to become among the twenty most industrialised and developed nation in the world by the year 2020 with aim of having a GDP and a national per capital income per year target of not less that $900 billion and $4000 respectively( Oni,2010), it is however important to discover the chief risks which has contributed to the past decrease in the GDP and poor development of the of the Nigeria construction sector and also, recognise hindrances that will stand to the achievement of the vision 2020 successfully as well as continuous sustainability of the Nigerian construction economic sector . Therefore, this report seeks to identify the most inherent risk in the Nigeria construction projects which when analysed and resolved, will lead to a proper construction project management, boost the Nigeria economy, fostering development and allowing Nigeria to stand in the level of highly developed countries.

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