Economic Factors and Infrastructure Project Success of Construction Firms in Rivers State, Nigeria
Nosakhare, Robert Okhiendovbehe
ronoj2001@yahoo.com ORCID ID:0009-0004-8597-5145
Department of Management, University of Port Harcourt, Nigeria.
Abstract
This study examines the effects of economic factors on the success of infrastructure projects by construction firms in Rivers State, Nigeria. Despite massive investments in public and private sectors to enhance various infrastructure, results from projects in the state continue to be plagued by delays, cost overruns, and inefficiencies. The study aims to identify the relationship among inflation, interest rates, exchange rate volatility and the cost and timeliness of the project which are the two major determinant of project success. A cross-sectional survey design approach was employed, and data collection was carried out in 162 managers and supervisors in six construction companies. The data were analysed with descriptive statistics and the Rank Order Correlation Coefficient (r) of Spearman via the software package of the Statistical Package and Data Analysis language (SPSS version 21). The results showed that there are strong and statistically significant relationship between inflation and project cost (r = 0.642, p = 0.000), interest rate and project cost (r = 0.551, p = 0.000) and exchange rate and project timeliness (r = 0.596, p = 0.000) and inflation and project timeliness (r = 0.517, p = 0.000). These results suggest that inflation and interest rates are the most significant factors that have an impact on the cost of projects and exchange rate fluctuation and inflation are the most contributing factors to project delays. The study concludes that macroeconomic instability plays a significant role in the cost ineffectiveness and delay of infrastructure projects in Rivers State. The report advises construction companies to engage in proactive risk management techniques, such as price adjustment provisions, hedging and financial forecasting, to reduce the impact of economic volatility. Furthermore, there is a need for policy interventions geared toward stabilising inflation and moderating interest rates and ensuring the consistency of exchange rates in order to enhance the performance of projects and ensure sustainable infrastructure delivery in Rivers State and Nigeria as a whole.
Keywords: Factors, Projects, Instability, Hedging, Interventions
