11 June 2018

Ghana: AGI Construction Sector, World Bank Discuss Way Forward for the Sector

A team from the Macro, Trade and Investment unit of the World Bank Group has paid a courtesy call on the leadership of the Construction Sector of the Association of Ghana Industries (AGI) in Accra.

Members of the team were Kaliza Karuretwa (Senior Private Sector Specialist), Hania Kronfol (Private Sector Specialist), Barbara Kotschwar (Senior Private Sector Specialist), Kobina Daniel (Senior Private Specialist), Lina Sawaqed (Consultant), Jim Friedlander (Consultant), Zhi Ken Gan (Consultant), Neustadt Amarteifio (Consultant), and Bianca Clinton (Consultant).

The team also met with the Ghana Investment Promotion Centre (GIPC) Board and related stakeholders to present and discuss key policy and institutional recommendations aimed at improving Ghana's ability to attract and retain private investment.

Speaking at the meeting the Chairman of the AGI Construction Sector, Mr Rockson Dogbegah mentioned delay in payments by government for public construction works as a major limitation to growth and the sustainability of the construction businesses and the sector at large.

He also cited the difficulty faced by local construction companies to raise finance from banks because of the government's failure to pay contractors on time as another challenge confronting the sector.

This he said explained why local construction companies were unable to compete effectively with their foreign counterparts adding that "as a result, the big and juicy contracts go to foreign companies who are relatively favoured in terms of payments for construction works."

Mr Dogbegah acknowledged the World Bank's support and collaboration with the sector in the areas of corporate governance; developing and sharing inputs in public private dialogue platforms; and the promotion of sustainability concepts in building designs and construction methods in collaboration with IFC Edge programme.

Mr Kobina Daniel, a Senior Private Sector Specialist with the World Bank suggested partnerships between local and foreign companies as a potential solution to delayed payments.

Kalisa Karuretwa of the World Bank mentioned the weaknesses of unions and the lack of strong collaboration and unified voice in dialogues with the government as issues that needed to be addressed.

She therefore indicated the need for more public private dialogues, which the World Bank was willing to support.

Mr Eric Defor, the Vice Chair of the AGI Construction Sector emphasised the need for local content as one of the surest ways to ensure that Ghanaians participate in the construction sector.

Dr Kenneth Donkor-Hyiaman, the Executive Secretary of the Sector cautioned against any move to liberalise the construction sector with investment to build the capacity of local construction sector to compete effectively.

To this end, he encouraged foreign companies to partner local companies and promote technology transfer.

The two institutions at the end of the meeting concluded that there was the need for the World Bank to keep supporting the government and the private sector to building sustainable institutional relationships.

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