• Market Watch

CIF implores govt to award construction contracts locally

• 10 Hours Ago - 2024-11-26 00:00:00

The Construction Industries Federation of Namibia (CIF) has urged the government which will lead the country next year to prioritise local construction companies over their foreign counterparts when awarding public contracts.
Its CEO, Bärbel Kirchner, made the call in light of the elections scheduled to take place tomorrow.
“As Namibia’s national elections approach, the Construction Industries Federation of Namibia (CIF) stresses the importance of considering the future of the country’s economy and employment opportunities, particularly within the construction sector,” Kirchner said.
The construction sector has been identified as one of the most crucial sectors for driving the economy, Kirchner added.
“The construction sector can once again become a key driver of Namibia’s economy, but only if the incoming government commits to creating an environment where local contractors can thrive. The establishment of a National Construction Council is the first step toward turning this situation around,” she said.

Foreign players
Foreign construction companies pose a further threat to the future of local construction companies, Kirchner explained.
“The CIF reiterates its earlier and repeated concerns that foreign contractor dominance threatens the survival of Namibian businesses. Unattainable financial prequalification criteria and unrealistic technical requirements continue to exclude local contractors from projects financed by both national and international institutions,” Kirchner said.
“This results in limited revenue circulation within the Namibian economy, lost opportunities for skills development, and increased dependence on foreign expertise,” she added.
According to her, the construction sector has been in sharp decline over the past decade, with its contribution to Namibia’s GDP falling from 3.1% in 2016 to just 1.4% in 2023.
Employment within the sector has also plummeted from 63 000 workers in 2016 to an estimated 28 000 today, many of whom are now employed in the informal sector.
“This downward trajectory is a direct result of the government’s failure to support local contractors. Over the years, numerous large-scale projects have been awarded to foreign firms, often at the expense of local businesses,” Kirchner said.

Pipeline
Citing the Ogongo-Oshakati pipeline replacement project, Kirchner noted that no local content allocation was made.
“For example, the Ogongo-Oshakati pipeline replacement project, valued at N$237 million, was awarded entirely to foreign contractors, including China Gezhouba Group Company Ltd, China Jiangxi Economic and Technical International Corporation Ltd, and New Era Investment Pty Ltd in joint venture with CCCC Origin Water Construction Group Co. Ltd.,” Kirchner said.
“Despite the proven capacity of local contractors, no local firms were awarded significant roles in this project. Additionally, no specific local content allocation was made for this project,” she added.
The awarding of contracts to foreign-owned construction companies has also resulted in money flowing out of the country, she said.
“These foreign-led projects have resulted in billions of Namibian dollars flowing out of the country, depriving local contractors of vital opportunities to grow and contribute to national development. Without immediate intervention, the construction sector risks further contraction, leading to the loss of thousands of jobs and additional strain on Namibia’s economy,” Kirchner concluded.