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Sunday, January 17, 2021

The Status of Local Participation in the Construction: To what extent are Zambians building Zambia ?

Columns The Status of Local Participation in the Construction: To what extent are...

By Wakumelo Mataa CTPD Researcher-Public Finance

Over the recent past years, the Government of the Republic of Zambia (GRZ) has continued to implement an ambitious infrastructure development agenda in line with its short, medium, and long-term development plans. However, the Centre for Trade Policy and Development (CTPD) notes that it’s one thing to ‘build Zambia’, and quite another thing to have Zambians significantly participate in ‘building their country’.

The Centre has noted with great concern that Zambian contractors have continued to receive lower-valued projects such as road maintenance as opposed to construction. The 20 percent sub-contracting policy aimed at increasing local participation, in its current form, only seeks to increase the number of sub-contracts awarded to local contractors without any regard to the value of these contracts. Further, it is our considered view that local contractors, to a larger extent, do not have the capacity to compete for contracts with their foreign counterparts on account of some peculiar challenges they face which includes limited access to plant and equipment, limited access to lines of credit, few skilled personnel, limited roadwork experience and poor construction management and organization skills.

In view of the foregoing, CTPD observes that “Zambians are not adequately participating in building Zambia.” Moreover, given that most of these projects are financed through debt, the continued dominance of foreign firms in the sector externalizes a considerable proportion of funds from the Country and thus makes it increasingly difficult for Government to raise enough domestic resources to pay back debt and support other programmes. The government should therefore scale-up efforts to increase the capacity of local contractors through skills development, skills transfer, and increased access to finance. There is need to extend the 20 percent sub-contracting policy beyond road construction and transform it into an enforceable law in order to enhance monitoring and compliance.

Furthermore, the policy should be enhanced by attaching a value measure as opposed to a quantity measure. In its current state, foreign firms will have an incentive to sub-contract low-valued projects to local contractors while retaining high-value rojects.

CTPD learnt through a recent assessment of the construction sector that from 2017 to 2018, the number of contracts awarded to local contractors declined marginally, falling by 1.4 percent to 336 in 2018 from 349 in 2017, relative to the decline in the number of contracts awarded to foreign contractors which contracted by 6 percent to 73 in 2018 from 93 in 2017. However, over the same period, the value of contracts awarded to local contractors dwindled by 47 percent to K15.3 billion in 2018 from K29.1 billion in 2017 where as the value of contracts awarded to foreign contractors rose sharply by a staggering 63 percent to K30 billion in 2018 from K11.6 billion in 2017.

10 COMMENTS

  1. This is one of good topics to bring to the table for government to give consideration just imagine if you are a contractor but you have no equipment meaning you dont have tools do you work what do you do.
    I was trying to think that government is capable of giving some loans to some reputable contractors to acquire machinery for building roads and bridges .
    If our people cannot afford these equipment then we are only joking in as much I know every civil engineer graduating from college would be exited to put into effect what he studied in the college but unfortunately he cannot find the needed tools to do his job it can be sofrustrating.

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  2. We as Zambians will never have the cake in our country.
    It is because of our attitude against local entities and bowing down to external pressure and manipulation.

    Look at Honeybee for example. They have been solely brought down by Missionpharma who was the previous supplier who stopped supplying due to non payment.
    Honeybee got hit bacouse it came in to rescue government unknowingly as Missionpharma stated loosing it leverage on government.

    The culprits are government for failure to pay Missionpharma and the victims are us Zambians as we will be denied those basic drugs in our health centres.

    Of course we can not deny that there are some irregularities here and there buy for the whole government and Parliament to fall in this trap is monumental to say the least. I’m sure…

  3. We as Zambians will never have the cake in our country.
    It is because of our attitude against local entities and bowing down to external pressure and manipulation.

    Look at Honeybee for example. They have been solely brought down by Missionpharma who was the previous supplier who stopped supplying due to non payment.
    Honeybee got hit bacouse it came in to rescue government unknowingly as Missionpharma stated loosing it leverage on government.

    The culprits are government for failure to pay Missionpharma and the victims are us Zambians as we will be denied those basic drugs in our health centres.

    Of course we can not deny that there are some irregularities here and there buy for the whole government and Parliament to fall in this trap is monumental to say the least. I’m sure…

  4. This is great. This government has indeed failed to empower Zambians to engage competitively in building Zambia. One problem that has not been mentioned here is delayed payments. Multinational companies have enough financial reserves to carry on work and even bid for another contract while waiting to be paid. A small Zambian owned company cannot continue to pay salaries to workers when the government is not paying. Government departments are supplied but they never pay unless someone knows someone or parts with something for the government cashier. One is reminded of the words of a former Defence Minister, ‘Bushe nimpiya sha ba noko?’

  5. The GRZ of the day should take full responsibility , it’s no good just saying

    ” we have created an enabling environment, so get on with ”

    Very short sighted GRZ. Those billions that were avaluble should have been used to develop Zambia from being a predominantly casual labour country to a highly skilled country….

    from word go , GRZ should have identified capable engineers and bussiness Zambians to train in project management and construction ownership with on going skills training.
    Atleast 70% of the borrowed money should have remained in Zambia.

  6. The problem is that most zambian believe that success is working for a company or being formally employed. We need to do away with this f00lish colonial way of thinking and become more entrepreneurial. Many believe in studying degrees and masters only to work for peanuts. The same ones always insult me here saying I am not educated and that I was just a mere lab technician in chesltone. However, I now own businesses employing the same people with degrees. Those in diaspora claim to be educated but are busy wiping backsides

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  7. Kaizar Zulu, the only reason why you are still supporting the man who fired you is because you know that once one is on the wrong side of a vindictive government all contracts dry up and payments stall. GBM was so squeezed that he returned to his vomit. Why do ruling parties suddenly gain more members?

  8. The article lacks depth and I was hoping for a lot more unravelling on why citizen construction companies perform poorly despite the 20% reservation policy on government contracts. Construction is a highly specialised field with many moving parts. It requires highly trained and experienced construction professionals to run it and not tenderprenaurs (sP) which is the case amongst the majority of Zambian Construction companies. You cannot run a construction company like a kantemba – you need skills, experience and plenty of hardwork for success in this field. Perhaps we should take stock of the available resources before we start apportioning blame.. We’ve been singing this son for the last 50years without success, sadly

  9. Kaizar Zulu everytime you make a comment regardless of the topic, you always speak negative about people leaving in diaspora. Any reason why?

  10. I gave two houses and my commercial building in Kitwe to be built by a so-called big Zambian contractor. It is over 17 months with cost overrun, loss of rent. I am a businessman and will never give another project to a Zambian. Work culture is bad. Never ever to a munthu. Let OF use them to steal.

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