Windhoek — Although suggesting an improvement for the construction sector, Minister of Finance Calle Schlettwein feels this is likely to only occur in 2018.
Over the past year-and-a-half, the construction industry experienced the severest economic circumstances since 2009, with the activity rate in the sector contracting by 26 percent last year, relative to 2015, and, according to latest figures, the contraction is even larger than that.
"Recessionary pressures are anticipated to remain on the construction sector for this year, but the worst appears to be over and the sector will improve gradually with better recovery prospects anticipated in 2018 going forward", said Schlettwein while addressing over 120 member-businesses at the annual general meeting (AGM) of the Construction Industries Federation of Namibia (CIF), which took place on 28 September 2017.
The Minister of Finance also had promising news for the members of CIF, saying: "On the public sector front, we will roll out interventions to revive the pace of activity on some of the ongoing major capital projects, while opening up opportunities for new ones."
This, he said, will be done through harnessing alternative means of financing, such as the proposed Infrastructure Fund at DBN, assessing Public Private Partnership options and aggressively seeking to harness such opportunities while keeping fiscal risks in check. Also, he noted that concerted efforts will be made to bring about effective State Owned Enterprise reforms and better utilisation of state assets as a means of enhancing investment in infrastructure development as well as the implementation of the Public Procurement Act, which offers opportunities for local procurement and tendering.
While referring to deep-seated contractionary pressures during the first two quarters of 2017, the minister anticipated improvements this year and said: "It is anticipated that there will be an overall economic growth in the range of 1.8 and 2.3 percent for this year, as opposed to the activity rate which stood at 1.1 percent for the previous year".
Also speaking at the AGM, President of CIF,Nico Badenhorst commended Schlettwein's leadership, noting that the construction industry is seeing significant change, greater control over Namibia's national budget, which not only includes the cutting of expenditure, but also the necessary focus on greater efficiencies in revenue collection.
"Past public procurement practices are also in the process of changing with the new Public Procurement Act which became effective on 1 April this year. Limited financial resources also necessitated the legislation of public private partnerships and we understand that the long-term goal is that 50 percent of the financial resource requirements for infrastructure projects will be financed through public private partnerships," said Badenhorst.
He added that to avoid a total crash of the industry, greater budget allocations for infrastructure development are necessary to support the construction sector and that to maintain the local construction capacity, a commitment is required from government that the local construction sector will be supported.