Ethiopia: Construction Industry Key to Sustained Development
Posted on :Friday , 24th February 2017
The construction industry has been playing crucial role in expanding infrastructures such as roads, schools, health centres, real estates, irrigation, residential houses and the like. Hence, it created job opportunities for hundreds of thousands allover the country and established value chains through facilitating markets to cement industries and small scale enterprises. As rapidly growing economy, the nation aims at cultivating the sector so that it would meet its development ambition.
Recently, when the Ethiopian Contractor Association Celebrated the 25th Anniversary of its establishment, Minster of Construction Engineer Aisha Mohamed said that the construction industry scored tremendous achievements in the last 25 years in accelerating the nation's economic growth. Since the sector has considerable contribution in supporting the ongoing development endeavour, the government has given high attention to maximize its productivity. In addition to fully utilizing the sector's potential, addressing its inherent weaknesses is vital.
As to Aisha, numerous inhibiting factors that retarded the sector's growth include: capacity limitation on execution, inadequate input, low level of productivity rate, absence of proper technology, the rent-seeking attitude and lack of good governance. She further said that the dysfunction of rules and regulations and inept institutions which do not deliver up to their responsibility have a deterrent impact on the sector's growth.
According to the Minister, in order to avert the negative trend of the sector, the government established a council at the national level which works for the creation of competent industry led economy. "For the successful accomplishment of the mission of the council, it is expected that the government will provide unrestrained support."
The Contractors Association Board Chairman Bekele Abera on his part said that since its establishment, the Association has carried out a number of activities in order to enhance the members' professional knowledge and skills by exposing them to new working environment with regard to designing and constructing. He further said that to attain the high level professional ethics, it has been working together with various stakeholders both locally and internationally. Moreover, to upgrade the sector's professional competency at the international level, agreements have been made with German, Korea, Turkey and South Africa contractors associations.
According to Bekele, the Association also made coordinated efforts to work together with renowned international construction companies which are engaged in constructing mega projects to draw lesson and share experiences. It has 1,600 members while more professionals are expected to join it. Since the government underlined the value of the construction sector for the nation's economic growth, it has expanded higher educational institutions to produce tens of thousands of engineers and architects that join the market every year. In addition, the already implemented 70/30 education policy encourages the expansion of natural science more than the social one; this situation also favours the construction sector which needs more architects and engineers.
However, there is discrepancy between what the market needs and the graduates' actual performance in the industry. Due to the inadequate exposure of the students to the practical skills in the industry while they are studying, they lack efficiency to translate what they learned theoretically into practice. This is one of the major challenges the employing companies are facing. Hence, to resolve the problem, strengthening the relations between the academic institutions and the construction industry is vital. The other challenge is the delay of the construction projects beyond the completion time.
As it is clearly known, when the construction is not completed as per the schedule, it incurs high cost on the owner and as most projects are owned by the government, the burden goes to the tax payers. There are many factors which contribute to the delay and among others,the lack of raw materials particularly, the imported ones, lack of sufficient finance on the side of the contractors, the change of design various times and dispute settlements are identified as highly critical. Dispute settlement mostly occurs between various stakeholders. For example, when there is a residential house that has to be demolished for the sake of construction, the owner may claim compensation and if the amount of the money which is going to be given to the claimant is below than the claim, dispute will arise between different parties and they resort to court to settle the issue.
As a result, the construction will be delayed and the construction cost also rises. On the other hand, the changing of design due to various factors also causes delay. With regard to addressing these problems, suggestions were forwarded from the platform: to avert dispute settlements, not to begin construction till the compensation is given should be taken as a way out and with regard to changing design, it is suggested that before the beginning of the construction, the contractors and architectures must read each other and whenever inconvenient situation occurs they should negotiate each other to reduce the cost of the construction.
On the celebration, several questions were raised by the participants and among others, "how companies can be competitive while the bid system for construction work lack transparency?" in his response, Bekele said that the situation is worrisome, how ever to deal with the matter the association has tried its level best and forwarded the issue to the pertinent officials for remedial actions. In sum, for the continuation of the success of the sector, addressing the sector's problems should get priority and for that all stakeholders should show their concern.
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