Tweaking construction industry policy proves vital for progress

Revising a decade old construction industry policy is pin pointed as pivotal to stabilize the market in the right direction for a transformative sector development.

At a panel discussion hosted by the Addis Chamber under the title ‘construction sector’s contribution for national economy: challenges and opportunities’, Wondimu Seta, State Minister of Urban and Infrastructure (MOUI), said that the government is working to revise the construction policy that was ratified in 2013.

“The policy needs to be timely, up to date and renewed to encompass stakeholders like actors in the private sector to have inputs unlike past experiences,” he said.

The State Minister pointed out that the construction sector was booming in the past but the failure to match that with support on the supply end has led it to face a myriad of challenges at the current stage.

He opined that the revision of the policy which was last ratified about a decade ago ought to be tweaked in order to propel the development sector forward.

“Lack of a transformative policy has back peddled development, while other challenges such the global pandemic, hard currency shortage and local conflict have also backtracked the construction industry,” Wondimu explained.

Now MOUI has set short, medium and long term solutions to tackle the problem, “Of course the entire actors, including; contractors, consultants, material suppliers, financers, relevant offices and project owners have to come to the table to provide a holistic solution.” “To do that we are working to establish a construction industry federation that will include professional associations, contractors and consultants, manufacturers and suppliers and other construction industry actors who will create cooperation, and discuss the issues plaguing the sector in order to come up with solutions to mitigate the same,” elaborated the State Minister.

Previously, there was a construction industry council which had only periodic meetings rather than identifying problems and providing solutions.

The platform was noted to have discussions about the sector as opposed to having a dedicated and detailed studies and solutions in order to come up with policy alternatives for the betterment of the construction industry. “It was not working towards solving the sector problems. Thus we now need a strong and institutionalized entity that shall transform the sector,” Wondimu underlined. According to the State Minister, like other pillars in the economy, the construction sector needs adequate finance like; bridge financing, project finance, working capital, and others including facilitating a fund for those who demand to invest in the sector without having an alternative to get a required finance, “As a result the government has given attention to the construction sector with regards to access to the required finance.”

The opening up of the financial sector for foreign actors in this regard is expected to come up with huge capacity mainly for the housing finance, which is believed to transform the construction sector in general. Expanding the sector manufacturing sector is also the other pillar that the government is looking to strengthen in the construction sector.

“As we give attention for the production of household consumers’ commodities, the construction sector needs similar focus. Unless otherwise we shall invest on the manufacturing sector for construction input production so as not to be import dependant, that may derail our transformation in the sector,” he said.

Using modern technology and human capital development in the construction sector have also been stated as crucial to improve productivity.

Regarding equipped contractors with modern technology machinery, a lease financing scheme is said to be introduced.