Globally
in the 21st century, infrastructure is the lifeblood of prosperity
and economic confidence. Successful delivery of well-planned infrastructure
investments offers developing economies and for that matter Ghana, an
opportunity to compete in the global marketplace. Construction is the mechanism
through which infrastructure is delivered. Aside this key role, the
contribution of the construction industry to the development of nations could
be summed up through it forward and backward linkages with other sectors and
industries of the economy. By forward linkages, the output (product) of the
construction industry serves as inputs (raw materials) of other industries. For
instance, construction output including all types and forms of infrastructure
like buildings, roads and dams, etc. are used as inputs by the financial,
transport and energy sectors and industries. Backward linkage on the other hand
relates the growth in the industries that supply construction inputs –i.e.
building technicians and professionals and manufacturing companies - to the
growth of the construction industry.
In
fact, almost every economic activity is linked up with the construction
industry. Therefore, the growth and development of any economy is directly or
indirectly connected with the construction industry. For example, after a rural
roads rehabilitation project in Ghana, costs for transporting goods and
passengers fell by about one-third on average according to a World Bank report
in 2000. The strong and significant positive correlation between infrastructure
and growth in Africa has also been highlighted by numerous studies. For instance, Escribano, Guasch, and Pena
(2008) found that infrastructure has a substantial effect on total factor
productivity. The construction industry is therefore considered an economic
backbone and major contributor to the gross domestic product (GDP) of Ghana.
For instance, its contribution to GDP has shown an increasing trend from 8.5%
to 11.8% from 2010 to 2013 respectively; a sign of its growing importance in
the development of the nation.
This
evidence notwithstanding, the construction industry in Ghana is substantially
underdeveloped and plague with numerous constraints. Economic development
cannot therefore be achieved on the back of a fragile developmental framework
and ill-equipped construction industry. In this article, I explore some of the
major constraints and discuss current initiatives towards developing the construction
industry in Ghana.
The Challenges of the
Construction Industry
The
research landscape is replete with a number of studies that have identified the
challenges of the construction industry. In a very recent study by Fugar et.
(2013), seven challenges including; absence of a principal development
regulatory body, inadequate financial resources, lack of investment in human
resource development, inability to embrace change, low technology in the
industry, lack of appreciation for workforce in the industry and high level of
employee mobility were identified. Common to most of the related extant
literature is the absence of a central agency to regulate and ensure the
continuous development of the construction industry (Fugar, et al., 2013; Osei,
2013; Ofori, 2012; Badu and Owusu-Manu, 2009; Gyadu-Asiedu, 2009; Ofori, 2000;
Ahadzie, 2009). Thus, although there exist professional bodies of architects,
surveyors, engineers, builders and technicians to regulate the activities of
their members, these bodies are usually weak in enforcing rules, regulations
and professional standards largely due to the lack of a legal mandate –
membership has been optional for most them. Externally, there is little or no
coordination among these construction-related institutions and bodies -both
public and private – although their activities dovetail into each other. Resulting,
the construction industry is fragmented and lacks the needed cohesion to
support the pace of development in Ghana. Moreover, construction output is
usually substandard usually delivered with cost overruns and beyond timelines.
The
construction industry in Ghana therefore faces some significant weaknesses. It
is not well positioned to meet the challenges which it will face at home and in
the West African sub-region in the near future. The internal weaknesses are
compounded by difficulties in the operating environment of its component
enterprises. The poor performance of the industry has many negative
implications for short-term economic growth and longer-term national
development. It is necessary for systematic effort to be made to develop the
industry. An agency which will spearhead this effort is required. In these
regards, the country is well behind several African nations such as Kenya,
Malawi, South Africa, Tanzania and Zambia in the development process.
Evidence of
International Best Practice
Similar
challenges in other emerging countries resulted in the establishment of central
agencies to coordinate the activities of all construction works. Interestingly,
most of these countries are making very remarkable strides comparatively towards
economic development. It is widely acknowledge that a strong construction
industry which is properly regulated by designated bodies is a major stimulator
of development in these countries. For instance, Singapore, Malaysia and South
Africa have the Construction Industry Development Board (CIDB); Construction
Industry Council (Hong Kong), Construction Industry Development Council
(India), National Construction Services and Development Board (Indonesia) and
the Institute for Construction Training and Development (Sri Lanka). Typically
in Africa, countries like Zambia, Rwanda, Malawi, Kenya and Tanzania all have
central bodies that are mainly responsible for the regulation and development
of their construction industries.
The Way Forward
Going
forward, both industry practitioners and academics are of the consensus that
Ghana also needs a central body to deal with the aforementioned challenges. Thus,
championed by the Chartered Institute of Building (CIOB) – Ghana, Chaired by Mr
Rockson Dogbegah, and funded by the Business Sector Advocacy Challenge (BUSAC)
fund, a comprehensive study was commissioned to build upon a situational report
undertaken by the Association of Building and Civil Engineering Contractors of
Ghana (ABCECG). A Steering Committee made up of the Presidents of the Ghana
Institution of Surveyors (GhIS), Ghana Institute of Architects (GIA), Ghana
Institute of Planners (GIP), Ghana Contractors Association Council (GCAC),
Ghana Institute of Technicians (GIT) and the Association of Building and Civil
Engineering Contractors of Ghana (ABCECG) was set up by BUSAC to led the
process towards establishing a central agency for the construction industry.
Further, a team of consultants led by Professor George Ofori (National
University of Singapore) and supported by Dr. DeGraft Owusu-Manu, Mr. Michael
Adesi and Mr. Kenneth A. Donkor-Hyiaman, all of the Kwame Nkrumah University of
Science and Technology were tasked to:
1. develop a case for the
establishment of an agency to spearhead and administer the regulation and
continuous development and upgrading of the construction industry in Ghana;
2. design the architecture and
operating framework of the regulatory and development agency for the
construction industry in Ghana;
3. prepare an action plan for the
implementation of the proposals for improving the performance of the
construction industry in Ghana.
The
“Study on a Regulatory Agency for the Construction Industry in Ghana” which
hinges on a baseline survey of stakeholders of the Ghanaian construction
industry confirmed the aforementioned challenges revealed by previous studies. As
part of the scope of works as agreed to by stakeholders at a workshop for
dialogue on July 3 2014, Chaired by Surveyor Osei Asante and adopted by the
Steering Committee, the report proposes for the establishment of a
“Construction Industry Development Authority (CIDA)” under the parentage of the
Ministry of Water Resources, Works and Housing to:
“lead the regulation,
restructuring, continuous improvement and development of the construction
industry in Ghana with the goal of enhancing the performance of the industry in
order to derive optimum efficiency and effectiveness in its operations and
outputs, to improve the quality of life of Ghanaians”.
Under
its purview, the CIDA shall be responsible for the construction industry which
may be defined: “as the part of the
economy which plans, designs, builds, maintains, refurbishes, extends, and
eventually demolishes buildings and items of infrastructure of all types”.
The CIDA is therefore proposed to undertake eight (8) major activities of:
1. championing
and leading for the regulation and strategic development of the construction
industry;
2.
advising the government on relevant
aspects of the construction industry;
3.
formulating regulations, standards and
codes to guide practice and procedure and nature of output in the construction
industry;
4.
registering contractors and consultants,
and enterprises linked to the construction industry, such as suppliers of
materials, and monitor and control their performance;
5.
proposing guidelines and frameworks to
help to streamline the work of, and promote good practice in, both public and
private organisations involved in the construction industry;
6.
providing and administer incentive
schemes to organisations to improve their performance;
7.
collecting, processing, maintaining and
disseminating information that is crucial for activities in the construction
industry;
8.
determining the needs of the
construction industry, from time to time, and formulate strategies and
programmes for attaining them.
To
undertake the above-listed activities, it is proposed that the CIDA should set
up regional offices with a headquarters in Accra and six (6) divisions as
listed below to spearhead its operations:
1. Construction
Industry Regulation, Monitoring and Control;
2.
Business Development;
3.
Technology Development (including
building materials);
4.
Human Resource Development;
5.
Enterprise Development and
6.
Industry Performance Programme.
Having
fulfilled two (2) out of seven (7) action plans, including the drafting of a
Bill for Parliament to pass into law for the establishment of the Construction
Industry Development Authority, it is hoped that the subsequent processes of
engaging government would be fruitful. The Steering Committee and BUSAC are
very certain about the commitment of all stakeholders towards this landmark
course for the development of the construction industry in Ghana. While the
process is on course, all stakeholders would be engaged at all levels to
address emerging concerns which could marred the hitherto success process.
Lesson Learnt and Concluding
Remarks
The
construction in Ghana faces numerous challenges including a weak regulatory and
development framework, financial, human resource and material constraints
beside others. The consensus reached between academics and industry
practitioners is that of the need of a central agency to regulate, develop and coordinate
the activities of all construction-related activities and bodies. The “Study on
a Regulatory Agency for the Construction Industry in Ghana” has made a case for
such an agency in Ghana. Experience elsewhere shows that there is merit in
adopting a centralized approach to construction industry development. The
lessons are, first, that construction industry development is a deliberate
activity which requires a long-term approach; second, industry development
programmes require the involvement of various stakeholders of the construction
industries to succeed, but the government should take the lead; and third,
there are likely to be dissenting voices among the practitioners who might
perceive that they might lose power or influence. Another lesson is that
country-specificity is key. Thus, it is important to understand the particular
context which will influence change in Ghana. The action taken in Ghana must be
the right kind of action for the country. Despite the many lessons which the
country can learn from the experience of other nations, ultimately, only a
truly Ghanaian solution will work.
The
proposed CIDA will not be a panacea for all the issues facing the construction
industry. For example, payment delays impact the growth of firms, and by so doing,
have an adverse effect on the efforts by the nation to develop a network of
construction firms able to deliver national assets, contribute to the economy
of Ghana and enhance the quality of life of Ghanaians by giving value, utility
and enjoyment in the buildings and infrastructure items they build. However, CIDA
cannot directly influence the efficiency of the national budgeting and
financial administration regime. Thus, even after the formation of CIDA, action
in other areas concerning the industry which lie outside the control of CIDA
will be required.
Kenneth A.
Donkor-Hyiaman
Member
of “CIDA” Consultancy Team
kwakuhyiaman@gmail.com
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