Construction sector Decries funding deficit

Players in the construction sector say lack of funding for infrastructure development projects has grounded their business to a halt.

They said that both local and international funders have shifted their priorities to funding the fight against the Covid-19 pandemic, causing shrinkage in construction business.

In an interview, Malawian Building Contractors and Allied Trade Association president Wickly Mhango said the shrinkage in construction business, including the reduced number of workers in ongoing projects due to Covid-19 measures, is leading to job losses. 

He said that even government has stopped funding various projects, including roads infrastructure improvement due to change of policy in government funding towards infrastructure.

Said Mhango: “The major challenge is that there is no funding. Clients are not releasing money because they view construction as not a priority due to Covid-19. Even government has not recently borrowed for construction from international lenders because of Covid-19.

“On another hand, government priorities have changed, we don’t know which direction they will take. Most of the money in the budget goes into construction, but now the resources are being channelled towards Covid-19 pandemic.”

He said for the first time in years, the current rainy season has gone without major road maintenance.

Mhango said the future looks bleak as contractors  do not know what will happen.

He said the construction sector is waiting for the government to show its direction in terms of public infrastructure funding and how the awarding of contracts will be handled.

The construction sector is key for economic growth because apart from creating jobs, it also contributes to taxes and a better outlook for the country; hence, the shrinkage of the sector impacts economic growth projections.

In the current revised budget, Minister of Finance Felix Mlusu allocated K114.3 billion to the Roads Fund Administration for the construction of roads while the Roads Authority was allocated K4.4 billion.

The minister explained that some projects, which were part of the budget in the 2019/2020 financial year, were deferred in the 2020/21 fiscal year because government was undertaking a review of the project portfolio.

He said: “Although some projects were included in the budget last year, they did not have detailed designs. This has led to delays in project implementation and cost escalations that could have been avoided.

“The government will speed up implementation of development projects by ensuring that only projects with detailed designs are allocated resources in the budget.”

As part of infrastructure development and improvement, government is implementing the National Transport Master Plan to guide sustainable development of a multi-modal transport sector for the next 20 years.

The plan seeks to reduce transport costs and prices across all modes, improve the safety of transport infrastructure and services and enhance and sustain passenger and freight transport systems.

Most of the country’s infrastructure is too old and dilapidated, requiring maintenance or complete replacement with new ones.