Government’s resolve to improve the business environment in Ghana by enhancing the business regulatory environment is laudable and commendable. We have heard the several policy initiatives in the agriculture Sector, Registration of Business, infrastructure finance initiatives, and national industrial revitalisation programme.
But where is the construction sector in the equation? We have heard the Minister of Roads and Highways give us hope about a "market cleansing agenda" which includes ensuring availability of funds before projects are undertaken and the blacklisting of contractors who do shoddy work. This is good and we encourage him to pursue it. I will take this opportunity to raise a few more issues about how to maximize the output of the construction sector.
The construction industry lacks the appropriate attention, leading to its stagnation and underperformance. The problems of the construction industry require comprehensive solutions, which includes the current efforts by the Minister. There is, therefore, a need to have a strategic agenda for the industry. First and foremost, the need for appropriate regulation in the construction industry cannot be compromised. The persistent self-regulation of the market has failed to deliver the expected goods and services we expect.
Very often, these goods and services are shoddy and leave much to be desired. This can partly be attributed to poor human resource development and management. For an industry that contributes more than 10 percent to gross domestic product, it is important we sustain it to create the needed jobs and revenues that the citizens and nation require to progress. The construction industry needs a radical strategic reform to support government’s agenda of "trade beyond aid". Currently, the industry is faced with a lot of challenges including;
(i) Delayed payment leading to cash flow challenges that threaten the sustainability of construction firms and banks;
(ii) Lack of capacity of local contractors to deliver big projects and quality;
(iii) Unfavourable competition from foreign players; and
(iv) Unwillingness of banks to advance credits due to high levels of unserviced debt.
Other countries use construction as a critical lever to regulate the socio-economic dynamics of their countries due to its strategic nature of being able to generate employment at all fronts and its strategic linkages to other industries and many endeavours of life and society. The AGI Construction Sector proposes the following strategic interventions to improve the construction industry in Ghana:
(i) There is the need for a construction industry development authority as a regulatory body backed by law as an apex body to champion the growth and development of the construction industry in Ghana;
(ii) There is the need for legislation on delayed payment and availability of funds before projects are awarded;
(iii) There is the need for governments to enact a policy that recognizes and accepts certified payments to offset delayed payment for government projects;
(iv) Government must accept Bid Declaration as a replacement for Bid Securities and Guarantees.
It's worth commending BUSAC Fund and its development partners DANIDA, EU and USAID for their tremendous support they have provided to enhancing the business environment in Ghana particularly the AGI Construction Sector. It is our hope to strengthen the partnership towards creating the progress our society desires.