Ethiopia: Booming Construction Sector Springboard for Other Industries
Posted on :Wednesday , 4th January 2017
The construction sector plays a pivotal role in accelerating economic growth. Its roles in the expansion of infrastructural facilities such as roads, schools, hospitals, residential houses, among others, can be mentioned.
The growth of infrastructural facilitate by itself is part of development. As a stimulant for growth, it creates an up and downward linkages so as to create value chains. It generates job opportunities for hundreds of thousands.
The booming of the sector triggers the expansion of industries such as cement, aluminium foils, tin, glasses, paints, wood and metal works. Previously, most of these inputs were imported from abroad but now they are being substituted by local yields. This has enabled the nation to save hard currency which would have been earmarked for importation. The sector is also integrated with agricultural practices. For example, the bamboo tree which is strong enough to be used for construction is cultivated in Benshangul-Gumuz State on over 40 thousand hectare of land.
Bamboo has replaced the eucalyptuses trees and some companies are engaged in exporting bamboo products to augment the nation's foreign currency earnings. In addition to this the rapid economic growth being witnessed in the sector also attracts foreign investors to involve in the construction industry. Such situation could create good opportunity for technology transfer. But, the sector has its own limitation which requires remedial action.
Recently, when dialogue took place between the government and various stakeholders, issues regarding the weakness of the sector was raised and discussed. Currently, though the number of higher education institutions which produce engineers and architects has increased there is a big discrepancy between their academic credentials and their performance in field practices.
Since 2001, based on the 70/30 educational policy numerous professionals have been joining the labour market but still knowledge gaps on the part of graduates is manifest telling a similar gap on their instructors. On the other hand, enrolling students in the engineering departments without their inclination has been compromising the quality of education.
Learners themselves are forced to grapple with the challenges being posed by hard science. Because, the capacity limitation at instructors level has a spill over effect on learners. Also, the availability of the necessary facilities at the educational institutions determines the quality of education. Hence closing the gap through supporting the institutions with adequate finance is essential.
Allowing trainees apprenticeship, the construction industry should play its own role in supporting engineering students. Contractors and architectures' professional association, in collaboration with the cooperation of universities, must discharge their responsibilities in ensuring quality education. But to date, the relation between the universities and the construction industry is very poor.
There are several research outputs on the hands of higher educational institutions, which come up with detail information about local inputs used by the construction industries. They produce information about soil types and stones. But due to poor integration with the industry the research papers are shelved with no use. Hence, making use of this resources is the responsibility of the institutions and the industry. Towards this end, establishing professional excellence centre is essential.
Currently ,the establishment of the Ministry of Construction as a separate entity will simplify the job. This way the sector will have a pertinent owner. As it is understood by now, urbanization has proceeded and as part of the structural change, new urban centres are flourishing and rural urban migration is steadily growing. This has become an impetus for the construction of manufacturing firms, real estates and residential houses. All these has brought good opportunities for the sector. The opportunity also goes to the cement industries.
The other thing that must be considered is the nation is still dependent on foreign companies pertaining to constructing heavy roads,bridges and high buildings. Such situation obligates heavy price on the nation and triggers capital flight. To reverse the situation, local construction companies should upgrade their capacity to the international standard.
But before competing at the global level they must upgrade their capacity to compete locally. Moving to the neighbouring countries without upgrading their capacity is meaningless. Hence, to reach to that required level ,professionals advise that companies must merge up so as to enhance their capacity in terms of capital,human resource and technology.
The other approach, regarding beefing up efforts, local companies must go for a joint venture with foreign companies. Such approach enables local companies to share experience and draw lesson from foreign companies. The construction sector is one of the vanguard sector expected to play a crucial role in the nation's endeavour to reach to the level of middle income status by 2025. Therefore, supporting the sector through market facility and creating value chain are vital and of all stakeholders must support it.
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