In 2016, new office spaces built in Lagos equaled 20% of the then existing stock, according to the consulting firm, Estate Intel Limited. These figures clearly underscore the potential of the market, the sheer appetite for high-grade commercial property. I remain a Nigerian optimist. The recession of 2016 and the subsequent weak growth- below 2 % since we came out of recession- are only a blip.
Much stronger growth is on the horizon as our politicians develop a better grasp of policies that unlock investment and the deliberative skills to negotiate consensus on and successfully initiate them. About 40% of the funds that go into high-grade commercial property come from abroad.
As we improve policies, including those concerning mortgage banking and urban planning, we will see more foreign investment in closing our famed 17 million housing gap. There will be a similar boom in the construction of infrastructure for delivering gas and oil, including to power plants and industries, when Nigeria finally delivers new oil industry legislation popularly known as the Petroleum Industry Bills (PIBS) and resolves pricing issues surrounding gas and electricity.
These are big-ticket transactions. Where there is money, there is always risk. But any country that wants to attract a lot of money, i.e. investment, must take risk mitigation very seriously.
The practice of arbitration is a key tool in managing the perception of risk and stimulating investment in construction. But construction is also a complex and dynamic business, involving not only quite large sums but the engagement of diverse skills and industries, from law, to information technology, logistics renewable energy, economics and various fields of engineering. A multiplicity of contracts and parties are also usually involved, often from different legal traditions.
So, to stimulate big-ticket investments in construction through the practice of arbitration, construction professionals, especially Quantity Surveyors, must invest in acquiring globally up-to-date arbitration knowledge and skills.
By Agele John Alufohai