Economic Impacts of Construction Project Overruns and Strategic Mitigation Framework for Akwa Ibom, Bayelsa, and Rivers States

Abstract

The consequences of project overruns are complex and affect various stakeholders including clients, contractors, consultants, and end users, with implications extending beyond the construction sector to the broader economic landscape of a nation. Both cost and time overruns in construction projects hinder anticipated growth in property and service production, which subsequently adversely impacts the rate of national economic growth. This article examines the economic impacts of cost and time overruns in building construction projects in Akwa Ibom, Bayelsa, and Rivers States, and proposes a strategic mitigation exploratory framework grounded in empirical field data.

A descriptive survey design was employed, and a five-point Likert scale questionnaire was administered to 317 construction stakeholders across the three states, with 242 usable responses representing a 76.34% response rate. Respondents comprised consultants (71%), clients (16%), and contractors (13%), covering residential (56%) and commercial (44%) construction projects. Data on the economic impacts and mitigation strategies were analyzed using mean score and standard deviation, while One-Way ANOVA was used to test the hypotheses at the 0.05 level of significance.

The findings confirm that cost and time overruns increase overall public expenditure (aggregate mean = 3.18), delay expected economic benefits from infrastructure projects, contribute to sectoral inflation, reduce funds available for other developmental projects, and discourage private investment in infrastructure. The overall aggregate mean for economic impacts was 3.02 (SD = 0.52). The One-Way ANOVA result yielded F = 0.353 and p-value = 0.703, confirming no statistically significant difference in respondents' perceptions of these economic impacts across the three states.

Eleven mitigation strategies were identified and strongly agreed upon by respondents, with an aggregate mean of 3.90 (SD = 0.31). Fixed-price contracts (mean = 3.96), use of modern construction technologies such as BIM and project management software (mean = 3.95), and improved communication among stakeholders (mean = 3.93) emerged as the most strongly endorsed strategies. The ANOVA result for mitigation strategies yielded F = 0.006 and p-value = 0.994, confirming that the identified strategies are broadly and consistently accepted as effective across all three states.

A strategic mitigation framework was developed, organized around two pillars — Technology and Process, and Economic and Procurement — and moderated by four contextual mechanisms: institutional capacity, stakeholder commitment, resource availability, and the socio-political environment. The framework follows an input–process–output logic, progressing from root causes categorized under human/political, economic, market, and technology factors, through identified consequences, to the outcome of on-time and on-budget project delivery. It is concluded that a combination of proper contract methods, effective use of technology, good communication, and strong management practices can help reduce cost and time overruns in construction projects in the Niger Delta region of Nigeria.