Evaluation and selection of construction projects in Nigeria

Investors in the Nigerian construction industry were surveyed in four major towns in southern Nigeria in order to collect data on the evaluation and selection criteria employed when investing in construction. Their responses were analysed based on type of developer, i.e. individuals, companies or government agencies. The net present value (NPV), discounted cash flow (DCF) and payback method were identified as the three most significant methods for evaluating construction projects. Of the developers surveyed, about 19$ undertook risk analyses, whereas 81$ allowed for risk by multiplying by a factor whose value varies. There was closer agreement between individual investors and companies on the priorities accorded to different factors when evaluating and selecting projects, than between government agencies and any of the other two. The availability of capital was considered of utmost importance by all the investors surveyed.