Assessment of Risk Management Practices in Nigerian Construction Industry: Toward Establishing Risk Management Index

Abstract

The construction industry requires continuous evaluation and formulation of risk management index, but Nigeria is yet to introduce a risk rating tool for the industry. This paper therefore assessed risk management practice in Nigeria construction industry and establishes Risk Management Index (RMI). Structural questionnaire were administered to the industry stakeholders, Data collected were analysed and ranked using Relative Importance Index (RII) which was to establish the Risk management Index (RMI). Modelled (RMI) was put to validity test using collated data with the RMI result being 0.53 which is indicative that the Nigeria construction industry is exposed to 53.04% risk thereby resulting to high failure rate of construction projects. RMI opts to assist investors in the industry to making strategic decisions and to serve as a tool for financial and insurance institutions to carry out feasibility and viability studies on prospective project for risk investigation. The industry shareholders should therefore adopt a pragmatic approach to risk control on construction projects by implementing RIM in the industry.