Political uncertainty over Nigeria’s election on Saturday and economic turmoil from low oil prices have slashed revenues and triggered layoffs for businesses across Africa’s biggest economy.
Construction firms, heavily dependent on government cash, are facing frozen projects, unpaid bills and mass redundancies, putting badly needed infrastructure development on ice, industry sources say.
Standard and Poor’s ratings agency downgraded Nigeria to B+ from BB- last week. The naira has fallen 20% since being devalued in November.
The top 10 construction companies in Nigeria accounted for 70,000 jobs a year ago but since then their workforces have been cut by a third.
The job losses are also a reminder that whoever leads Nigeria after the election will need to end its dependence on oil as the economy’s driver.
In the meantime, contractors are suffering. A spokesman for the Ministry of Works said it had received only 44-billion naira out of 98-billion naira allocated last year.
The minister, Mike Onolememen has said that contractors were owed ±230-billion naira between 2011-2014 and that 177 projects lacked sufficient funding to continue.
Government infrastructure projects always moved slowly, but firms were forced to scale down to skeleton crews last year and several are not expecting to resume work in 2015 at all.
