Abstract

The study examined the challenges facing the inflow of foreign direct investment (FDI) in Nigerian construction sector. Questionnaire and interviews were structured to elicit information from the respondents. A total of 194 questionnaires were administered to construction professionals, contractors and public clients knowledgeable and experienced in FDI and FDI related projects located in Lagos and Abuja, Nigeria. 155 were retrieved and used for analysis. Severity weighting was computed and variables were ranked based on the weighting. The Kendall’s Coefficient of Concordance was used to determine the significance agreement on the ranking. The result revealed the factors that cause low FDI to include low presence of infrastructure development by the government and long time for return on investment among others. Lack of policy framework, insecurity and terrorism were identified as the most severe hindrances to inflow of FDI to construction while the most severe effects of low FDI were felt on contribution of construction to GDP. The result also revealed significant agreement amongst stakeholders on the ranking of the causal factors to low FDI, hindrances to FDI and the effects of low FDI. Therefore, the Nigerian government should create an enabling environment and set up construction free trade zone in addition to establishing construction development bank to act as a panacea for affordable infrastructure development in Nigeria.

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