WHY PROJECTS FAIL- THE HIGH STAKES OF CONTRACTOR CLASSIFICATION IN NIGERIA

Imagine the excitement in a local community when a long-awaited construction project—maybe a new road, a school, or a health center—finally begins. Bulldozers clear the land, workers get to work, and promises are made. But as time goes on, that initial excitement often gives way to frustration. The once-bustling site is now empty, with equipment left to rust, and the so-called “development” is stuck in limbo. What went wrong? All too often, it’s because the contractor assigned to the job wasn’t capable of seeing it through. In Nigeria, this story is all too familiar. The root cause? An inadequate contractor classification system that allows companies to bid on projects they aren’t qualified to complete.

Now picture what it would mean to have a robust, reliable contractor classification system, one that could help governments and communities avoid these pitfalls by matching the right contractors to the right projects. With such a system, projects could progress smoothly from start to finish. Imagine the impact: fewer abandoned projects, better quality infrastructure, and millions saved from the public purse. For Nigeria—a country with immense development potential but a legacy of infrastructural setbacks—the benefits would be transformative. A contractor classification system isn’t just bureaucracy; it’s the blueprint for a brighter future, ensuring that only qualified, capable contractors are entrusted with the nation’s development projects.

The stakes are incredibly high. Consider the losses Nigeria faces due to poor contractor classification and selection. Roads intended to improve accessibility and safety are left in various stages of completion, creating more inconvenience than progress for residents. In Imo State, the Alike-Umuosochi-Umulogho road project was awarded with much fanfare, only for the contractor to abandon it midway, leaving the community with no road and no clear timeline for completion. Then there’s the Itapa/Ijelu/Omu road construction project—a crucial route linking over three farming communities in Ekiti state. Despite being one of the State’s most vital roads, its reconstruction has dragged on for years, turning what should be a straightforward project into an almost legendary source of public frustration.

And it’s not just road construction. The story is similar across sectors. The Ajaokuta Steel Company, once a shining symbol of Nigeria’s industrial future, has been left in the dust after swallowing $8 billion with little to show for it. Today, while we import $4 billion worth of steel annually, Ajaokuta sits unused—a stark reminder of the dangers of awarding major projects to unqualified entities. Or take the Abuja CCTV project, a failed initiative for which the government spent $460 million, only to leave the capital city without a functional security system. The Rivers Monorail and the Tinapa Free Trade Zone tell a similar tale, with these ambitious projects stalling due to contractors that could not handle the scope, leading to billions in wasted funds and failed public trust.

This is where the concept of contractor classification comes in. A robust classification system could prevent such mishaps by providing a structured way of assessing contractors’ capacities before awarding contracts. Imagine if, before a project began, procurement officers could access a database that detailed each contractor’s financial health, technical expertise, history with similar projects, and regulatory compliance. For a major highway, for instance, they would see whether a contractor has the manpower, the equipment, and the experience needed to finish on time. For an energy project, they could assess if the company has handled large-scale infrastructure before and has the capital to keep it going until completion. With this knowledge, the procurement team could make informed decisions and ensure that only contractors with the right qualifications take on critical projects.

Globally, countries and companies leveraging structured contractor classification systems are seeing remarkable improvements in efficiency and project outcomes—and Nigeria could be next. Take Venminder , for example. Known for its third-party risk management expertise, Venminder assesses a vendor’s financial health, technical capabilities, cybersecurity practices, and regulatory compliance. Imagine how useful this could be in public procurement: by vetting each vendor on multiple dimensions, Venminder helps clients (including government agencies) avoid the pitfalls of partnering with unprepared or under-qualified contractors. For government projects, this level of insight translates into fewer stalled projects and fewer resources wasted on unsuitable vendors who can’t meet the demands of large-scale work. Venminder’s assessments mean fewer surprises during project execution and a much lower likelihood of facing budget overruns or missed deadlines, all because the right contractor was chosen in the first place.

Similarly, Dun & Bradstreet ’s Vend-R platform brings transparency to the procurement process. This system offers detailed profiles of vendors, including their financial stability, project history, and the technical skill sets they bring to the table. Imagine if Nigeria’s procurement officers could pull up a contractor’s profile to view their financial performance over the last five years, see their experience on similar projects, and understand how they performed on previous government contracts. This level of transparency is a game-changer. By reducing the risk of entrusting essential infrastructure projects to vendors without the capacity to deliver, the government could redirect resources from managing failures to initiating new developments.

If Nigeria adopted a system like D&B’s or Venminder’s, public procurement would experience a shift in focus—from chasing down contractors to tracking measurable milestones and pushing projects forward. With reliable data at their fingertips, procurement officers could more accurately forecast project timelines, budgets, and outcomes. Contractors that have been rigorously assessed are more likely to complete projects on time, contribute to economic growth, and enhance public trust in government initiatives. Instead of seeing procurement as a gamble, stakeholders could view it as a strategic investment in Nigeria’s development, grounded in informed choices and transparent data. This kind of transformation would ensure that public projects not only get off the ground but reach their intended impact, benefitting communities and advancing national goals.

When Projects Fail: The Cost of Poor Classification

Without a strong contractor classification system, the costs of these failed projects are staggering—not only in financial terms but in lost time, opportunities, and public trust. The 3,050MW Mambilla Power Project, for instance, was conceived in 1972, yet it remains unfinished over fifty years later. Had the contractors been thoroughly vetted and their capabilities matched to the project’s requirements, Nigeria might already be reaping the benefits of an additional 3,000MW in its power grid. The country’s hydropower potential is further hampered by abandoned or underutilised projects like the Ikere Gorge Dam, whose turbines have never generated a watt of electricity, and the Oyan Dam, where similarly neglected turbines sit idle. These failures aren’t isolated incidents; they reflect a systemic problem with the way contractors are chosen and categorised, one that ultimately deprives millions of Nigerians of essential services and modern infrastructure.

In road construction, too, poorly classified contractors have left major routes incomplete and dangerous. The East-West Road, meant to link several key states in the Niger Delta, has been subject to decades of intermittent progress, placing lives at risk and limiting economic growth in a region that should be bustling with activity. Likewise, communities in Ogun State suffer due to abandoned roads and flyovers left behind by previous administrations. The roads are often started with enthusiasm but quickly stall, leaving residents with unfulfilled promises and dangerous, incomplete structures.

Building a Robust Contractor Classification System

So, what would it take to build a contractor classification system that would actually work for Nigeria? First, this system would need a detailed set of benchmarks to classify contractors based on verified technical expertise, financial capacity, and past project performance. The process could start with a standardised pre-qualification assessment where each contractor’s abilities are carefully documented and categorised. Contractors who want to take on large-scale infrastructure projects would have to demonstrate a history of handling similar projects, backed by audited financial records, verified project portfolios, and quality certifications. This way, contractors aren’t just relying on flashy proposals or promises; they’re proving they can handle the job.

To ensure the classification system stays accurate, it should involve regular third-party assessments. This would ensure that contractors’ qualifications are continuously monitored, and any changes—like a dip in financial health or the loss of key personnel—are noted. The system would also need a tiered structure, with classifications matching contractors to specific project types and sizes. For instance, a contractor with experience in community-level projects would be restricted from bidding on national infrastructure projects unless they moved up the ranks through successful, reliable work. This setup wouldn’t be static; contractors could move between classes as they grow, giving room for upward mobility but ensuring only those truly equipped take on critical roles. A dynamic, frequently updated system that incorporates feedback from completed projects would provide an adaptive structure, allowing for flexibility but maintaining the rigor needed to prevent mismatches.

A Blueprint for Nigeria’s Infrastructure Future

With a solid contractor classification system in place, Nigeria’s procurement process could go from a costly gamble to a reliable investment in the country’s future. Imagine a Nigeria where the East-West Road is finished on time, where the Mambilla Power Project generates electricity for millions, and where communities finally see projects completed to a high standard, not left as half-built skeletons. By investing in contractor classification, Nigeria can ensure that public funds are used responsibly, leading to high-quality infrastructure that enhances lives and supports economic growth. The system wouldn’t just benefit the government; it would provide a clear pathway for Nigerian contractors to build reputable businesses, grow their technical capacities, and scale to take on bigger projects through merit, not shortcuts.

Building a robust classification system will require investment, but the rewards are too significant to ignore. As Nigeria moves forward, this kind of systematic, performance-based approach could set a new standard in public procurement. By filtering out contractors who aren’t ready for high-stakes projects and aligning capable contractors with projects that match their strengths, we lay the groundwork for a more prosperous, interconnected, and empowered Nigeria. Instead of relying on luck, Nigeria could be guided by a structured, transparent process that chooses the right builders to bring the nation’s ambitious visions to life. This is more than an administrative fix—it’s a blueprint for national transformation, one where the promise of progress is kept, where projects start and finish strong, and where Nigerian infrastructure stands as a testament to the country’s resilience and future-facing potential.