By:Nghiinomenwa-vali Erastus
There are economic gains if politicians, government authority and procurement experts can reach consensus to assist the local construction sector, says Bärbel Kirchner, chief executive officer of the Construction Industries Federation of Namibia (CIF).
Kirchner’s appealscomes at the time the construction sector declined for the fifth consecutive quarter, registering a contraction of 10%t in real value added by the end of the 3rd quarter of 2022.
The sector has also recorded a 25.6% decline in the third quarter of 2021.
The CIF boss stressed that there is so much to gain if the responsible stakeholders prioritise the construction sector.
“There is a lot to gain if every politician, every government authority – at all levels of government – all senior executives and their teams, especially all procurement specialists -simply everyone who has Namibia’s interests at heart -will contribute to a focused effort to get our local construction sector going again – this is ultimately in the interest of all of us,” she said.
Kirchner indicated that if the highlighted stakeholders can focus on engaging local-owned businesses, much-needed jobs will be created and money will stay in the country.
She said that every job leads to the creation of other jobs and that essentially it can have a snowball effect, where everyone gains.
Kirchner blasted the relevant stakeholders saying that giving construction work to foreign companies at the expense of capable local companies is against the country’s aspiration and stance of creating prosperity for Namibians.
“Engaging foreign businesses, where we have ample local capacity is in total contradiction to our nation’s quest of achieving empowerment, equality, and prosperity,” she said.
The CIF believes that once all stakeholders are aware of the importance of prioritizing locals for job creation and keeping them inside it will bring a better consensus on what is needed for the construction sector.
Kirchner explained that the CIF stance on local empowerment does not naturally mean that the country needs to close its borders.
Instead, she explained, there must be the opportunity for everyone to be involved in the sector, where the foreign does not squeeze out local, and where the big does not squeeze out the small.
She said it requires a balanced approach in order to maintain and continue building local capacities.
Having experienced a downturn in this important sector since 2016, the stalwarts in the industry are hoping that it will get better on a more continuous basis and that eventually, the industry will move up and out of the doldrums.
Kirchner said government is unlikely to finance large-scale infrastructure developments and capital projects unless it will have continued access to grants and loans, also considering the development budgets of previous years.
For the 2022/2023 financial year, the development budget had seen a 10 % reduction and it amounted to N$4.9 billion, whereas in the year before it was N$5.5 billion.
Furthermore, questions are being raised of the companies that are getting a chunk share of the development budget.
Government expenditure on construction registered a decline of 6.9% during the period by the end of the third quarter of 2022, according to the latest quarterly GDP.
Irrespective of the size of development budgets and the amount of building and infrastructure projects, and how they are financed “focusing on and supporting Namibian-owned businesses could facilitate a catalytic effect on the Namibian economy at large”,she stated.
Kirchner said the consequence of the government’s restricted financial capacity represents its ability to stimulate the economy by way of plowing money into capital projects.
She said CIF assessment in 2022 revealed that competition to tender for projects was at an all-time high, where not only bona fide Namibian companies remained to compete with foreign companies, but also where smaller businesses were displaced by the larger, more established contractors.
“We are very hopeful that this year we will see a drastic change in the way our Namibian-owned contractors are being supported. We feel that our continued call – for many, many years – to support our local contractors – large and small – is starting to resonate. I think that we are all aware of the importance of it,” she said.
Although the CIF advocates greater support for locally-owned businesses, it also supports the notion of creating the ultimate investor-friendly environment, as domestic and foreign investments are also key to stimulating the economy.
The conditions need to be optimal, Kirchner said.
The construction sector representative stated that the ease of doing business is an important factor, which is largely determined by the amount of red tape and administrative requirements.
At the same time, the overall policy environment must radiate certainty for the potential investors.
Email: erastus@thevillager.com.na
CIF Boss Appeals For The Revival Of Construction Sector
