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
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Tackling the Shortage of Construction Skills in Nigeria
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TACKLING THE SHORTAGE OF CONSTRUCTION SKILLS IN NIGERIA
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
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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.
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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.
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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
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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
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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.
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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.
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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.
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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
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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
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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
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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