Assessment of Retention on Valuation in the Nigerian Construction Industry – Clients’ Perspective

Abstract

The largest clients of Construction Industry (CI) in developing countries around the world are their respective governments. However, the CI in this clime is dominated by small and medium sized construction firms (SMSCFs). The aim of this study was to assess retention on valuation in the industry from the clients‟ perspective, with a view to improving financial performance of SMSCFs. Survey and non-probabilistic convenience sampling technique were adopted and data were obtained from industry stakeholders operating in Lagos. A total of fifty questionnaires validly completed were analysed using SPSS (Statistical Programme for Social Sciences) software Forty-four percent of the respondents have work experience in companies whose approximate annual turnover was < N 100m < N 500m. Finding shows that release of retention suffered from delay to outright non-payment of the retention monies and the retention practice of the three tiers of government is non-discriminatory of category of contractors. In conclusion, either delay or outright non-payment of retention monies on valuation will add to financial difficulty of SMSCFs Also, the retention policy of government, applying five (5) percent flat on their project does not consider the financial capacity of SMSCFs and latter‟s potential to contribute and grow the gross domestic product.