Development strategies for the building and construction-materials industries in Africa

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UNITED NATIONS

ECONOMIC COMMISSION FOR AFRICA

DEVELOPMENT

STRATEGIES FOR THE BUILDING AND

CONSTRUCTION-MATERIALS INDUSTRY IN AFRICA

ECAC 69.0 D4885

i ABDIS ABABA 1 JULY 1995

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a

UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL

ECONOMIC COMMISSION FOR AFRICA

INDUSTRIAL AND HUMAN SETTLEMENTS DIVISION

Distr.: GENERAL ECA/IHSD/IDPS/023/95 July 1995

ENGLISH

Original: FRENCH

DEVELOPMENT STRATEGIES FOR THE BUILDING AND CONSTRUCTION-MATERIALS INDUSTRIES IN AFRICA

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CONTENTS

Page I. INTRODUCTION 1

II. ROLE OF THE CONSTRUCTION SECTOR IN ECONOMIC DEVELOPMENT 2 III. THE PRESENT CONDITION OF THE CONSTRUCTION SECTOR 2

1. The building sector as an element in the national economy: 2

the example of Burkina Faso

2. The building-materials sector as an element in the construction sector: the example of Morocco

IV. NECESSARY ACTION TO BOOST THE CONSTRUCTION SECTOR 9 V. DEVELOPMENT CONSTRAINTS IN THE CONSTRUCTION SECTOR H

VI. FUTURE DEMAND ■ 12

VII PROSPECTS FOR DEVELOPMENT OF THE CONSTRUCTION AND

BUILDING MATERIALS INDUSTRY 1D

VIII. PRIORITY AREAS FOR DEVELOPMENT OF THE CONSTRUCTION INDUSTRY

4. Construction-related systems and services

17

1. Government policies and institutional support 17

2. Building materials production and development of raw materials and

other inputs

3. Research and development 17

17

IX RECOMMENDATIONS FOR A CONSTRUCTION SECTOR

DEVELOPMENT STRATEGY

1. Organization at the national level 18

2. Organization at the subregional level 3. Organization at the regional level 4. The need for integrated planning 19

5. Revision of building codes and regulations 6. Research and development 19

7. Construction-related services - 19

8. Building materials 20

_. 21

9. Financing

X. CONCLUSION ■ 22

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ECA/IHSD/IDPS/023/95

I. INTRODUCTION

Africa like other developing regions, faces an acute housing problem. A considerable part of the

ioLTente pooriy housed or virtually homeless. This situation affects most people in Africa; the

„ iit, however, are the poorest segments of the population who often have to contend with

unemployment or underemployment.

2 One remedial approach lies in the development of the building and construction-materials sector, and

LicuMy Tough Tncreased production of construction materials and the introduction of pricing

particularly mrougn ^^ ^ ]QwAncomG sociaI strata. Given that the building and infrastructure-

sector tends to be labour-intensive, its promotion should help alleviate unemployment.

3 In many African countries, demand in the construction sector still outstrips Iocs of building materials, despite the efforts that have been made The reliance of sl

imported building materials has been on the increase. During the period between 1975 and 1985, these imports increased by more than 33 per cent, from $US 1,019 million worth of building materials, to $US 1 382 million. These imports include not only finished goods but also a wide range of basic building materials as well as factors of production such as machines, energy and various raw materials This

SS^contributed, on the whole, to an over-dependence on imports and a worsening of me already

critical balance-of-payments position. The hardly mitigated inflation in the sector has resulted in higher

costs and diminished private-sector participation in housing supply.

4 For the most part, development planning in African countries has not given as much priority to building materials production as is envisaged in both the Lagos Plan of Action and the UnitedI Nations Programme of Action for African Economic Recovery and Development. The following aspects of the Plan

and the Programme are relevant to the building industry:

(a) Boosting regional self-sufficiency;

(b) The effective mobilization of human resources;

(c) The establishment in each African country of an industrial base capable, among other things, of meeting the basic needs of the population and ensuring the efficient utilization of local natural resources

as well as the creation of employment;

(d) The development of the natural resources of each country through collaborative efforts to

meet the socio-economic needs of the people; and

(e) The sustainable development of the construction and building-materials sector and the

involvement of women in shelter provision issues.

5 The high cost of building materials is a major area of concern to African countries particularly in view of the fact that they have the potential to minimize costs through sustainable use of their own natural resources. The need to boost the construction and building-materials sector has been evoked in various

resolutions and recommendations of ECA bodies.

6 In furtherance of those decisions, ECA has formulated an integrated development programme for the sector A meeting of African experts, organized under ECA auspices, identified four main parity

areas (a) government policies and" institutional support; (b) building materials production and the

development of raw materials; (c) research and technology; and (d) development and management of

construction-related services.

7 The declaration of 1987 as the International Year of Shelter for the Homeless and the formulation, in 1990 of the Global Strategy for Shelter to the Year 2000, reaffirmed the need to intensify efforts at the

naSandinternational levels to promote development in the construction and building-materials sector

so as to achieve the objective of shelter for all, with particular attention being given to the most

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ECA/IHSD/IDPS/023/95 Page 2

disadvantaged social strata. African countries can use this global policy framework as a springboard to a

new, dynamic phase in their housing strategies.

II. ROLE OF THE CONSTRUCTION SECTOR IN ECONOMIC DEVELOPMENT

8. The level of sophistication of housing and other infrastructure is a physical manifestation of

economic growth. The structure and developmental profile of the construction sector is therefore governed

by the condition of the economy as a whole. In developed countries, for instance, the construction sector

accounts for more than half of total investment (making it the leading investment sector)- moreover investment in the construction sector tends to be long-term. Clearly defined policies and strategies

pertaining to the construction sector should be formulated and adopted in parallel with development strategies for the economy as a whole. The construction sector in Africa accounts for between 40 and 56

per cent of total capital formation; in Europe, the proportion is in the range of 51 to 66 per cent.

9. The construction sector serves an extremely broad spectrum of end-users, encompassing virtually all sectors of the economy. The formal sub-sector (i.e. excluding individual construction activity for shelter

purposes in urban and, to an even greater extent, in rural areas) represents only about 30 to 40 per cent of construction-sector production. Large-scale projects and public works (bridges, dams, irrigation systems,

industrial projects, transport infrastructure, public health projects, educational facilities, etc.) constitute the bulk of construction undertakings (approximately 60 per cent). Forward planning in the sector should

therefore give due attention to its continued capacity to satisfy the demand not only for housing but also for amenities - such as roads, hospitals, and communication links - all of which are inseparable from the construction sector, as well as other socio-economic imperatives. That balance is essential to development in the construction sector.

III. THE PRESENT CONDITION OF THE CONSTRUCTION SECTOR

10. The construction sector can be broken down into three main elements: construction equipment,

building materials and the various services connected with the building sector (i.e. the professional input of engineers, architects, town planners, quantity surveyors, entrepreneurs, skilled workers, etc.). The role of the construction sector in the socio-economic milieu may be analysed from the perspective of these three

elements.

11. The experience of most African countries shows that the qualitative and quantitative inadequacy of the construction sector to meet basic socio-economic needs has been an obstacle to the attainment of various development goals. The sector is heavily dependent on foreign expertise and on imported building materials. Construction systems as well as building regulation are, for the most part, of foreign origin, and

hence, ill-suited to local conditions and local needs. One result of this is the high cost of construction.' The

implications for human settlements development are a legitimate cause for concern, so that a new policy direction and fundamental development programme should be formulated to place the sector on a sound

footing.

1. The building sector as an element in the national economy: the example of Burkina Faso1 12. The effect of liberal government policies over the past decade or so regarding allotments, construction projects and urban development as whole has been to further stimulate two important sectors:

construction and infrastructure development.

1 Burkina Faso - Ministry of public works, housing and urban development. Background report on the seminar, "Materiaux de construction .... alternatives face a la devaluation. October 1944.

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13 From production and operational figures by economic sectors, the National Statistics and Development Institute (INSD) produced a table (table 1) showing the yearly production patterns in the

building and public works sector.

Table 1:

Total production

BLDNS & oublic works sector Percentage (%)

1987 1,055,696

133,361 12.6

1988 1,109,130

113,836 10.6

1989 1,182,423

136,584 11.6

1990 1,215,833

160,906 13.2

$US 1 = FCFA 490

14. The building and public works sector accounted for 10 to 13 per cent of total national production

between 1987 and 1990.

15. None the less, the contribution of this sector to overall GDP is rather low (5 to 8 per cent).

(i) Imports connected with the building and public works sector

16 Table 2 extracted from data provided by Burkina Faso's Development Statistics Information Bulletin (Bulletin d'Information Statistique et Economique du Burkina), published in May 1993, shows the share of the building and public works sector in building materials imports over a three-year period (1988 to 1990).

Table 2:

IMPORTS (millions of FCFA) Cement

Steel

Sheet metal

Plumbing & electrical equipment TOTAL (1)

Total imports into Burkina Faso (2) Percentage (1/2)

Tmnorts of manufactured goods (3)

1988

6,656.10 5,052.90 2,716.40 361.4 14,786.80 144,947.9 10.20 35,896.90 41.20

1989

5,876.70 5,388.10 2,422.20

410.7 14,097.70 175,307.4 8 31,270.50 45.10

1990

7,460.70 6,556.70 3,284.70

475 17,777.10 145,832.9 12.20 38,779.40 45.80

17. Nearly half (i.e. 45 per cent) of all imports of manufactured goods were connected with the building

and public works sector.

18 On the other hand, exports of building materials and of various items of equipment connected with the building and public works sector accounted for only a small proportion of the total (less than 0.5 per

cent, from 1988 to 1991).

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(ii) The impact of devaluation: (the CFA franc was devalued effective 12 January 1994^

19. In the area of housing, the cost of building materials increased dramatically in the wake of the devaluation. Table 3 shows the price changes for some of the building materials.

Table 3:

Cement

Sheet metal (35 mm) Timber

IPN 80 12 m Metal bars Metal Tacks

BEFORE DEVALUATION

48,000 F/T 1,100/mL 550 F/mL 18,100 F/unit 190,000/T 500 F/packet

AFTER DEVALUATION

75,000 F/T 2,100 F/ML

950 F/ML 35,500 F/unit 410,000 F/T

800 F/packet

2. The building-materials sector as an element in the construction sector: the example of Morocco2

20. In Morocco, as in most other African countries, the building-materials sector constitutes an important segment of the manufacturing industries. With 495 plants in 1990, the building-materials sector represented nearly 8.6 per cent of industry; its 35,600 - strong workforce accounted for 8.6 per cent of industrial employment.

21. Building materials production represented 10 per cent of industrial production in 1990, and contributed a value-added element of DH 3.731 million ($US 1 = DH 8.4), or 12.80 per cent of the value- added element attributable to the industrial sector as a whole.

22. In terms of investment, the building-materials sector accounted for 12 per cent of industrial

investment.

23. The building-materials sector, like the construction and public works sector, experienced remarkable growth between 1987 and 1990, with the number of plants in operation increasing from 430 to 495 during that period - an annual increase of 5.04 per cent on average. The workforce in the sector increased from 30,290 in 1987 to 35,600 in 1990. The percentage increase in the workforce was 7.5 per cent in 1988 and

15 per cent in 1990.

24. While, during the period from 1987 to 1990, the industrial sector grew by 45 per cent overall, growth in the building materials sector during the same period was in the order of DM 6,344 million (i.e.

63 per cent).

25. The value-added element in the building-materials sector increased, in real terms, by 40.2 per cent from DH 2,661 million in 1987 to DH 3,731 million in 1990.

2 Kingdom of Morocco - Ministry of commerce, industry and

privatization. Document, Materiaux de construction au Maroc:

secteur en plein developpement. October 1992.

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26 In terms of investment, there was a remarkable capital-formation effort in the building-materials sector during the period from 1987 to 1990. Investment increased from DH 326 million in 1987 to DH 785 million in 1990 or 20.25 per cent of the value-added element generated in the sector. The production patterns and value-added element of the building-materials sector over a four-year period (1987-1990) are shown in the graph below (p.9), while the pie chart (p. 10) shows the share of production attributable to

different sub-sectors.

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2

DC c

I

(spuDsnoqj_)

tin MOITIIW NTMnTTT-rrS

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Cement manufacturing constitutes the most important sub-sector accounting for 30 per cent of production and 35 percent of the value added element attributable to the construction sector. Ia

^Paints Miscellaneousaccessos Chalkandplaster ^Concrete Asbestos&abrasives Cement Bakedclay Glass Ceramics

SJOther

SHARE OF PRODUCTION, BY VALUE, FOR DIFFERENT SUB-SECTORS

8.0%4.3% 4.4% 7.8% 3.8% 30.1%

11.4% 9.0% \ 17.7% 3.4% Theferro-concretesub-sectoraccountsfor17percentof building-materialsproduction,andgenerates15percent oftheindustry'svalue-addedcomponent.

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Table 4: Percentage of gross capital formation attributable to the construction sector: selected African

countries

Country Botswana Burkina Faso Cameroon Egypt Kenya Libya Mauritius Sierra Leone South Africa Sudan Tunisia Tanzania Zimbabwe

1980 58.4

0.5 49.2 3.4 5.3 0.9 3 51

1.6

-

1 5.8 2.3

1981 42.6 0.3 48.2 3.8 4.5 0.9 3.3 55.6 1.7

-

1 5.3 3.1

1982 49.6

0.3 49.4 3.3 4.3 1.3 2.1 46.6 1.6 5.5 0.8 9.7 3.3

1983 58.4

0.1 54.9 3.1 8.3

_

1.6 55.5 1.6 1.9 0.9 8.3 2.7

1984 46

0.6 56.4 2.7 8.5

_

1.1 56

1.7

_

1 11

1.5

1985

6

_

2.2 3.6

_

2.6 55

1.6

_

0.3 9.5

_

1986

3.2 4.3

3.4

1.5

0.3 8

1987

2.6 5.2

1.5

0.6 12.6

Computed on the basis of national accounts data base: cf. pertinent details. 1987 Part 18 II, United Nations.

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5: Numbers employed in tfap- mnstruction sector (in thousands)

1

COUNTRY

Angola __

Benin

1 Botswana

Burundi

Central African Republic i Chad

1 Gambia

Ghana Kenya Malawi Mauritius

Niger .

Seychelles Sierra Leone South Africa Swaziland Tanzania Togo Zambia Zimbabwe

_ —

YEAR

1986 1985 1989 1989 1986

1989 1987 1987 1989 1988 1990 1989 1989 1987 1990 1987 1984 1987 1989

j_ 1984 '

TOTAL

367.6 80.8 175.5 58.3 16.1

11.3 26.1 394.3 1355.5 433.1 279.4 28 22.3 67.3 5254.7 82.7 534.8 63.9 359.6 1036.4

CONSTRUCTIO N

21.6 5.4 23.9 10.7 0.8

1.7 2.9 18.2 67.4 32.5 11.1 3.6 1.6 7.3 417.5 4.8 21.1 5.3 20.8 45.3

PERCENT OF TOTAL

6 6.6 13.5 18.3 5

15 11.5

4.6 5 7.5 3.2 12.9 7.2 10.8 7.9 5.8 4 8.3 5.7 4.3

Source: Annual statistical Bulletin, 1991. International Labour Office, Geneva IV. NECESSARY ACTION TO BOOST THE CONSTRUCTION SECTOR

27 One major reason for the failure of most initiatives intended to develop the construction sector in Africa is the ineffective implementation of comprehensive programmes that address all the factors atrecting

the condition of the industry. The following are among the most essential imperatives:

(a) An evaluation, in the short, medium and long-term, of the industry's potential;

(b) Institutional support from governments, with a view to enhancing the contribution of the construction sector, in quantitative and qualitative terms, to economic development;

(c) Addressing the question of the industry's financial base and investment possibilities;

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ECA/IHSD/IDPS/023/95

Page 10

(includ/* m ??*""?? ±& availabilitv of adequate reserves of building materials and building equipment

(e) Developing and upgrading technical capacities in the area of construction/building materials

production; and 5

(f) Capacity-building, particularly through training.

28. Human settlements issues can best be addressed by placing them in their proper perspective In most African countries, human settlements planning has apparently been confined to the somewhat restricted viewpoint of sectoral self-sufficiency. The planning process should take into account the fact that programmes touching on all sectors of the economy require construction work in one form or another- that these needs often occur more or less simultaneously; and that, consequently, if the construction sector is to adequately meet the requirements of the public health sector, for example, it must also be able to address the requirements of other sectors, such as industry, education, transport, agriculture, etc. To do this effectively, it must embark on a process of self-assessment in order to evaluate its own resource capabilities

as well as its own needs and limitations.

29. At present, the construction sector is not in a position to undertake that kind of self-evaluation exercise. Such a task requires inputs from other agencies, and particularly, from a central public body having the capacity to coordinate the various areas of need; prioritize those needs according to primacy and urgency; assess the means at the industry's disposal to address the overall socio-economic imperatives- and

help secure for the construction sector the assistance it requires.

30. Human settlements programmes and projects, and particularly those that depend on the construction

sector s productivity, should therefore reflect the needs of the construction sector as a whole Such programmes and projects should, in addition, take into account the country's overall production capacity

in the domain of construction.

31. For the reasons already mentioned, the linkages between human settlements programmes on the one hand, and overall socio-economic imperatives as well as the construction sector's resource base on the other

constitute a sine qua non for fruitful implementation.

32. As already indicated, only 30 to 40 per cent of human settlements and other construction

requirements is met by planned construction work. However, it is a vital facet of the industry which must

be given due priority. Housing construction, which is an indispensable sub-sector in the socio-economic

and political context, will constantly demand the attention of planners and policy makers, who must ensure that there are enough housing units, of adequate quality. While housing needs represent only a fraction of construction requirements, it remains the only facet that can be determined in advance and which can serve as a basis for establishing the overall requirements of the sector as a whole. Housing needs are influenced by factors such as population growth, urbanization and depreciation of existing housing units. Other relevant factors are demolitions, natural disasters and so on. Consequently, new mechanisms should be

formulated for the purposes of quantitative projection of human settlements requirements in each African

country, on the basis not only of population growth and migratory patterns, but also income growth and improvement in the standard of living over time. In each case, the requirements for new housing units are considerable, and are forecast to increase.

33. As already stated, infrastructure ~ including plants and other large-scale installations - also have an impact on construction requirements, because such infrastructure is a necessary element for economic

growth, apart from being directly or indirectly linked to human settlements development. Infrastructure requirements should therefore also be taken into account in development planning.

34. In the context of the construction sector, the quality aspect, which is also important, should be given

particular attention. It comprises, on the one hand, quality of buildings and of the materials used in their construction, and, on the other, construction technology. For instance, by correlating various technical

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specifications, a customized mix of construction components can be achieved, and this usually ensures quality in construction. In most African countries, the construction methods used are of foreign origin, and often ill-suited to local requirements. Moreover, the use of imported construction technology necessitates the use of imported building materials, thus curtailing the development of the local building materials

industry.

35. The primacy of programmes to reduce the dependence of African countries on imported building materials products need hardly be emphasized. The demand for cement and steel, the main building materials used, is not likely to diminish, because both are indispensable inputs in the construction of certain types of installations, particularly in the urban areas and for public works. Consequently, the production capacity for cement and steel should, whenever possible, be established or - where it already exists - strengthened. Given that cement factories and steelworks require a large capital outlay, and considering the insufficiency in some countries of local limestone, iron-ore and/or other essential raw material reserves, as well as the not uncommon disparity between a given country's demand for cement and steel and its production capacity for those commodities, it may in certain cases be necessary for interested countries to work out cooperation agreements in this area. It is to be hoped, too, that efforts will be made to reduce the consumption of costly inputs (such as cement and steel) by using them economically. For instance, cement need not continue to be considered as the only durable building material; other building materials can prove equally hardy while, in addition, helping reduce the construction costs.

36. It is clear, then, that the building materials industry constitutes an important segment of the construction sector. As such, it merits adequate attention with a view to accelerating its development; this can be done through government support, private-sector participation and intra-industry networking at the plant level (small- medium- or large-scale), in parallel with the conditions obtaining in each country or regional grouping.

V. DEVELOPMENT CONSTRAINTS IN THE CONSTRUCTION SECTOR

37. Construction materials constitute the main element in the construction of a dwelling house (some 75 per cent of the physical input, in the case of a low-cost residential unit). One of the factors impeding the development of low-cost human settlements in Africa is the primacy given to capital-intensive units which are heavily dependent on imported raw materials. The numerous possibilities for the adoption of local production capacities are used only sparingly. Thus far, few African countries have undertaken to promote building materials production units which use locally-derived inputs. The efforts in this area have been insignificant on the whole; one reason for this is the paucity of local financial resources, but the main impediment remains the lack of a veritable development strategy for the local building-materials industry.

38. The building materials industry can contribute significantly to economic recovery in Africa, in various ways. The building materials production process would generate employment, apart from catalysing growth in other sectors. The products for which building materials are used, such as dwelling houses and other infrastructure, are an important bulwark of economic growth. None the less, the reality is that the building materials sector in Africa, over the past decade, has stood out only by reason of the pressures it has occasioned on the continent's scarce foreign exchange reserves.

39. A wide range of raw materials are to be found in most parts of Africa, in sufficient quantities.

Owing to certain constraints, however, these raw materials are, in most cases, not fully used. There are usually no data on the nature of the raw materials potential, and exploitation of the resources h often hampered by various institutional and financial constraints.

40. In countries where traditional technologies have proved inadequate, efforts should be made to improve on them. Strategies should be formulated to develop new technologies locally and to adapt imported technologies to suit the local context. The production process, and in particular, the quality- control mechanism, can be greatly facilitated by means of appropriate technical assistance designed principally to optimize efficiency in the use of building materials.

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41. Attention should also be given to the need for intra-African transfer of technology. At present, African countries are developing local building-materials production and utilization technologies separately.

This is both tedious and unproductive. Every endeavour should be made to avoid duplication of effort.

In this context, the exchange of background data amongst African countries can greatly facilitate the development of technological applications and resource utilization.

42. To support intra-African technology transfer, a central data base relating to local building materials should be established. Such a system would serve as a means of gathering information pertaining to ongoing projects in each member State, other developing countries, as well as those being carried out under the aegis of international organizations involved in the field of building materials. The information so gathered would then be disseminated to member States.

43. A number of African institutions have already gone some way in developing local building materials arid identified appropriate technologies for their utilization. None the less, not enough has thus far been done towards actualizing these results. Consequently, an effort should be made to mobilize local research - and - development institutions as well as other specialized agencies across the continent, with a view to developing local building materials production through the application of research findings.

VI. FUTURE DEMAND

44. Projections of future patterns in the construction sector lie outside the scope of this paper. It is, none the less, apposite to highlight certain data relating to variations in future demand in Africa's construction sector.

45. Forecasts based on the mean variant of United Nations estimates indicate that Africa's total population two decades from now may stand at some 1,149 million (from 642 million in 1990). The World Human Settlements Report for 1986 reveals that around 42 per cent of rural dwellings and some 35 per cent of urban dwellings in Africa were one-room units, with an average occupancy of 2.23 persons per unit.

A considerable proportion of buildings and other infrastructure in Africa is inappropriate and dilapidated fbr want of maintenance, in dire need of rebuilding or renovation work. To adequately meet requirements, dwelling houses must be replaced at an annual rate of 2 per cent. Without taking into account the present housing deficit, 3.8 million new dwellings are required annually. During the 1980s, it became clear that African governments could no longer continue to be direct providers of human settlements and that this role must be assumed by the private sector - formal and informal. Table 7 shows the human-settlements budget deficits, on the basis of need, for a number of African countries.

46. 79 per cent of urban households in sub-Saharan Africa have access to clean water; as regards sanitary facilities, the figure is 47 per cent. In the rural areas of the same region, these statistics are down to 28 per cent and 18 per cent, respectively. A WHO estimate indicates that to provide the continent's population with clean water and sanitary facilities requires, on average, $US 41.5 and $US 23 per person, respectively. To achieve 100 per cent coverage, sub-Saharan African countries would have to invest $US 10.2 billion on water supply infrastructure, and $US 6.4 billion on the installation of sanitary facilities, in the rural areas alone. Table 8 shows the share of public expenditure on housing and other social amenities for a number of African countries. It varies between 0.13 per cent and 11.07 per cent of the overall budget.

47. Between 1980 and 1988, public expenditure on education across sub-Saharan Africa dropped from

$US 41 per head of population to $US 30 per head. This means that investment in the construction of school and university buildings also decreased.

48. Africans, particularly those in the rural areas, do not as yet have adequate access to primary health care, because not enough hospitals, dispensaries, medical centres and other public health amenities have been built. Access to maternal health facilities is generally low in the region, the worst case being Somalia, with only 2 per cent coverage.

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49. In the area of food self-sufficiency, urgent measures are required; again, these touch on the construction sector, particularly as regards the renovation of irrigation systems, as well as the establishment or upgrading of social amenities and related technologies.

50. The implementation of the second United Nations Transport and Communications Decade (1990- 2000) will involve (a) the construction of about 15,000 km of graded highway and repair of some 200,000 km of rural roadway, the whole requiring total investment of about $US 10 billion (1990 dollars), and (b) repair of 85 per cent of the surfaced roads, 40 per cent of the unsurfaced roads, and 25 per cent of the rural access roads. Additional capacity is required to alleviate the over-dependence of Africa's construction industry on imported building materials. Table 6 gives an indication of the volume of investment required in the region to strengthen building materials production capacity.

Table 6: Investment requirements to strengthen the building materials production capacity (million $US)

Material Cement structures Steel

Glass

Clay structures Total

1980-1985 2,000

600 125 316 3,041

1985-1990 4,560

1,155 387 692 6,794

1990-1995 11,100 2 160 940 1,140 15,340

1995-2000 16,600 10,650 875 2,428 30,553

Total 34,260 14,565 2,247 4,476 55,648

Source: Economic Commission for Africa, Organization of African Unity, and United Nations Industrial Development Organization. African Industrial Development Decade programme. Framework for national, subregional, regional and international programme formulation and implementation; United Nations, New York, 1982.

51. As can be seen in table 6, investment in the sector by African countries during 1995-2000 must at least be twice what it had been during the period 1990-1995. However, as there is no indication that the investment requirement thus far has been adequately covered, the situation may well be that these countries will have to invest even more than the projections indicate, to achieve the required level of additional capacity in respect of certain building materials.

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ECA/fflSD/IDPS/023/95 Page 14

Table 7: Government expenditure on housing: selected African countries (Expenditure as percentage of overall budget).

COUNTRY

Botswana Burkina Faso Comoros Egypt . Ethiopia Kenya Liberia Nigeria Swaziland Togo Tunisia Uganda Gambia; ;

YEAR 1980

0-9

■0.3

-

0.7 0.3 2.5

_

-

_

3 3 .'2

. -

1981 0.9 0.2

_

6.3 0.6 0.1 0.5

_

-

3.2 2.9 2.9

-

1982 0.8 0.2

-

1.7 0.2 0.2

_

2.1 1.5 1.8

-

1983 0.9

_

1.6 0.3 0.2

_

-

0.3 2

1

-

1984 0.7

_

3 1.9 0.3

_

0.4

_

0 3.9 : 1.2

-

1985 0.6

_

2.6 0.6

_

0.2 0.5 0 1.5 1.2

-

1986 0.6

_

2.8 0.3

•

_

0.5 0.8 0.5 0.8 0.8 0.8

1987 1

_

3.5

_

1.5 1.6 0.1 0.9

_

0.4

1988 1.4

_

3.8

_

0.3

_

1.1

_

0.3

1989 1.4

_ ■ ■

3

_

0.4

_

1.1

_

-

Source: International Monetary Fund. Government Finance Statistics Yearbook, 1991.

Table 8: Government expenditure on bousing and community amenities: selected African countries (expenditure as percentage of overall budget).

COUNTRY

Botswana

Burkina Faso Cameroon

Central African Republic Comoros

Congo

C6te d'Tvoire Egypt

Ethiopia Gambia Ghana

YEAR

1980 7.15

0.3 3.6

_

1.2

0 1.6

1981 6.64

0.2 1.44 0.18

_

2.06

_

6.8 1.36

1.66 1982

9.06

0.16 0

_

0.69

_

3

0.6 3.35 1.39

1983 6.36 0.33 4.61

_

0.91

_

2.5 2 3.32

-

1984 4.74 0.13 5.89

_

3.03

_

1.81

2.8 0.6

_

2.14 1985 4.53 0.13 7.18

_

3.7 3.2

_

2

1986 6.8 0.16 4.94

_

4 3.4

_

1.93 1987

8.3 0.2 6.77

_

6.3 4.1

_

1.93 1988

8.4

_

5.8

_

5

1989 9

.

2.3

_

5.8

_

-

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Guinea-Bissau Kenya Lesotho Liberia Malawi

Mauritius Morocco Nigeria

Senegal

Sierra Leone Sudan Swaziland

Tanzania Togo

Tunisia Uganda Zambia Zimbabwe

0 5

5.7

1.4

_

-

5.9 3.2

_

-

0 4.83

_

2.78 1.65 3.37 0.97

_

3.92

_

0.08 10.5 2

1.44 3.17 5.38 2.91 0.41 1.08

0 4.7 1.33 1.64 0.98 5.05 1.01

_

2.79

_

7.35

1.03 2.07 3.38 1.84 2.03 1.56

3.62

3.18 0.2 1.48 0.01

4.28 1.09

_

2.95 0.38

_

6.16

1.08 0.26 4.29 1.04 0.04 1.45

2.23 4.04 0.19 0.74 1.43

2.63 0.9 0.43

1.93 0.38

_

5.88

0.99 2.83 6.04 1.22 0.04 0.46

2.32 2.67 0.46 0.86 1.09

2.46 0.98 0.38

-

5.51

1.11

1.78 9.8 1.16 0.79 0.42

11.07 1.53

-

0.99 1.53 3.59 0.97 0.58

-

8.36

-

1.39 8.5 0.77

0.8 0.58

8.33 3.3

-

0.99 1.8 2.16

0.4 1.5

-

5.6

-

8.5 0 0.4

-

2.5

-

0.2 3.18

-

8.6

-

2.1 0 0.3

-

3.5

-

3.2 3.4

-

4.6

-

2 0 0

-

Source: International Monetary Fund, 1988, 1991, Government Finance Statistics Yearbook

Footnote: The items included in housing and community amenities are as follows:

(i) housing and community development (ii) water supply affairs and services

(iii) sanitary affairs and services including pollution abatement and control (iv) street lighting affairs and services

VII PROSPECTS FOR DEVELOPMENT OF THE CONSTRUCTION AND BUILDING MATERIALS INDUSTRY

52. Africa is rich in natural resources, which if developed with the help of appropriate technology, can go a long way in alleviating some of the problems currently affecting the construction sector. Even though not all countries possess raw material reserves in abundance, the principle of collective self-sufficiency among African States can serve as a basis for a collaborative approach to develop national potentialities

within a subregion or grouping.

53. Although mineral prospecting work and geological research has revealed the characteristics of substances which are fairly highly-rated internationally, a lot less is known about the raw materials used in the building materials industry. A number of African countries possess large quantities of clay, limestone, dolomite, trass, gypsum, timber and other raw materials. However, some of these countries lack adequate information concerning the quality, quantity and potentialities of the substances in question. Such information is, none the less, indispensable to optimize building materials production from local resources.

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54. Local building materials production is also hampered, in some African countries, by inadequate energy resources. In this context, the development of non-conventional sources of energy, such as sawdust, farm refuse, peat, etc. through comprehensive research programmes, can go a long way towards alleviating the situation. Solar energy is another promising alternative.

55. The reliance on overseas companies to carry out projects in Africa is not only onerous in terms of foreign exchange, but also tends to marginalize local entrepreneurs, whose capacities could be promoted for the benefit of the region. There are, in some African countries, a number of companies capable of undertaking large-scale construction projects; they should be given an opportunity to add to their experience by undertaking projects jointly with overseas companies. A national programme of assistance to local companies in the areas of financing, capital acquisition, and project management can boost their performance considerably.

56. Construction costs can also be minimized through the adoption of appropriate technology using locally available construction materials and manpower. About 40 per cent of the portland cement content in building blocks can be replaced with trass without in anyway affecting the quality of the final product.

In the absence of programmes to boost local building materials production, self-sufficiency in the construction sector will be difficult to achieve.

The importance of the informal sector3

57. The informal sector is a characteristic feature of developing countries. There is a parallel economy to the official one, and the former generates significant movements of financial resources. This pool of capital, and the human resources represented by the people, should be mobilized. Here too, the State should not trammel the parallel economy with taxes or bureaucratic impediments; rather, it should promote it as much as possible so as to enable it to make a just contribution to the development of the construction industry. The participation of the people in the construction of their own shelter is a central aspect of that development. Such participation should therefore be encouraged and supported.

58. This will obviously have an impact on construction technology, for the materials and products used will have to suit the economy in question. Primacy will have to be given to simple products and inputs, such as sheets and patches, blocks, girders, plaster, panes for windows and panels for doors.

59. A further problem that arises relates to the distribution of these products: there would have to be a smooth distribution network which ensures access to the products in question. One possible approach is to establish distribution yards or centres which, in relation to the construction industry, can fulfil two additional useful purposes:

(a) Providing basic training to buyers and users of the products; and (b) Facilitating quality control.

60. Generally speaking, these two areas are not well serviced in many African countries, owing to lack of resources; they should therefore be located as judiciously and economically as possible. The distribution centres can play a useful role in that connection.

61. However, no quality control mechanism can function effectively without product performance tests, and as an assurance that the product is actually tested throughout the various stages of production, it is strongly recommended that there be certification by an impartial and competent agency to the effect that

3 Excerpt from Pierre CHEMILLIER, Chairman of CSTB (France):

presentation at the first World Conference of the Construction Industry. Tunis. May 1993.

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the end-product satisfies the requisite level of performance, and that upon such certification, the product be accordingly marked.

62 The appropriateness of this procedure for developing countries can hardly be over-emphasized. It

should be the necessary catalyst for the deveiopment of a construction industry. This presupposes, of

course, the existence of credible - i.e. impartial and competent - laboratories.

VIII. PRIORITY AREAS FOR DEVELOPMENT OF THE CONSTRUCTION INDUSTRY 63. In view of the diverse nature of the developmental challenges pertaining to the construction and building-materials sectors, development programmes in this domain must address clear-cut priorities. Four distinct priority areas have thus far emerged from ECA studies, and could serve as a point of departure for national, subregional and/or regional development strategies:

(a) Government policies and institutional support;

(b) Building materials production and development of raw materials and other inputs;

(c) Research and development;

(d) Construction-related systems and services.

1. Government policies and institutional support

64. The establishment of industrial units requires a relevant policy environment. African States should therefore endeavour to formulate policies that would encourage and promote the construction and building- materials industry. Mechanisms should be established embodying promotional institutions for the implementation of those policies.

2. Building materials production and development of raw materials and other inputs

65 The expansion of infrastructure (roads, airports, office buildings, as well as housing and other community infrastructure) is a significant aspect of economic development. As the construction sector is linked to the building-materials sector, a downturn in the latter necessarily impinges on the former and economic growth suffers as a result. The building-materials sector is therefore a key segment of a country's economy. In that connection, programmes to optimize the use of locally available resources should be given

due priority.

3. Research and development

66. The establishment of research institutions and the formulation of research programmes to develop technological capacities, economic parameters and performance evaluation mechanisms for the construction sector can contribute immensely to its development.

67. In view of the financial constraints affecting most of the region, and the similarity of the problems

most African countries are faced with, exchange of information and research publications on the bmldmg- materials sector should be encouraged. Indeed, the importance of research as an avenue to technological

advance can hardly be exaggerated.

4. Construction-related systems and services

68. Efficient construction-related services and the availability of cheap building materials are a

prerequisite to the successful implementation of construction projects. Delays, inefficient methods and lack of proper management capabilities tend to increase construction costs. The gains from low construction

costs are vitiated by inefficiency, poor planning and lack of proper financial-management mechanisms. The

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development of construction-related services with a local entrepreneurship base, coupled with appropriate back-up measures, can greatly boost overall efficiency in the sector. Further, the adoption of appropriate construction-related systems and services necessitates a review of the existing codes and regulations pertaining to the construction sector.

69. The establishment of efficient construction-related systems and services can hardly be effected successfully without qualified manpower capable of competently planning and carrying out construction projects. Given the shortage of qualified manpower in many African countries, training programmes and

institutions should be set up through collaborative effort.

IX. RECOMMENDATIONS FOR A CONSTRUCTION SECTOR DEVELOPMENT STRATEGY 70. It would be inappropriate to advance a policy framework or strategy as applicable to all African countries. The needs and priorities of individual countries are bound to differ. None the less, the development of the construction sector requires the formulation of concrete policies and strategies, their implementation through practical programmes and actions, and the establishment of institutional and administrative structures designed to facilitate the implementation process.

71. In that connection, the two main aspects of the construction sector - building materials production and construction-related services - should be reorganized and developed, each in keeping with the specific imperatives pertaining to it. Construction sector development strategies and actions should embody those two aspects, individually and collectively. Further, national and international agencies should be cognizant of their respective roles.

72. In the formulation of construction sector development strategies and policies, due priority should be given to the need for support mechanisms such as institutional structures and manpower training. Such policies and strategies should be thoroughgoing, with a clear definition of various roles at all levels.

1. Organization at the national level

73. In most African countries, construction sector development activities are spread out among different departments or agencies. This results in developmental imbalances and wastage of resources. The current situation calls for thorough coordinated research to determine the likely economy-wide future demand patterns in the long term, a plan of action for construction sector development, clear definition of roles for various agencies, and a policy implementation framework with adequate management, coordination and support mechanisms.

74. To facilitate the organizational structure at the national level, a central office of coordination and support should be established. Its functions would include construction sector development programme planning on the basis of the requirements of end-users in various sectors, managing the importation of building materials and equipment, tackling problem areas and ensuring the smooth implementation of projects. National public agencies responsible for the construction sector should be strengthened and their roles clearly defined to enable them to contribute to the development of the sector. At present, these agencies are, in most cases, charged with administering procurement contracts and supervising their execution, and drawing up periodical building materials price indexes.

2. Organization at the subregional level

75. A coordination mechanism along the lines described above but structured at the regional or intergovernmental level can also facilitate the development of the construction industry. One possible strategy is to establish development coordination committees for the construction and building-materials sectors, within the framework of regional economic groupings such as ECOWAS, CEEAC, SADCC, AMU, etc. The work of such coordination committees can be facilitated through liaison mechanisms between country-level central agencies of the type described above.

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ECA/IHSD/IDPS/023/95 Paee 19

3. Organization at the regional level

76. Sectoral development strategies at the national and subregional levels should, of course, be supplemented by regional programmes - through liaison mechanisms and cooperation agreements between African countries inter se as well as with non-regional partners and international institutions. Regional programmes could include technology promotion projects, dissemination of research results, feasibility studies, consultancy services, training programmes, and the promotion of pilot projects and demonstration

units.

4. The need for integrated planning

77. A central construction-sector service or private-sector actors, should formulate forecasts of future demand in the construction sector in the long term. Broken down into distinct areas, such as building materials, construction-related services, financing, manpower, management services, etc., the demand forecast can serve as a focal point for sectoral and sub-sectoral linkages and functions, thus providing a sound management framework. It can also be the basis for a national construction-sector development programme in which objectives in the short, medium or long-term, as well as the expected roles of public- sector and non-public-sector entities can be set out.

5. Revision of building codes and regulations

78. One major drawback to the development of the construction and building materials sectors is the fact that most of the building codes and regulations currently in force in most African countries are ill-suited to local needs. Most of these codes and regulations are modelled on legislation in developed countries.

The modifications that have thus far been instituted in some countries do not go very far. The tests and specifications applied are often those set under AFNOR (French), BS (British), DIN (German) and ASTM (American) standards, depending on the source of funds and the nationality of the firm undertaking the project. Rarely is due attention given to the specific conditions obtaining in the country where the project is being carried out. From the standpoints of both production and marketability of these products between African countries, the introduction of new building legislation is essential to the development of the sector.

6. Research and development

79. Research is an important element of development, and the construction and building materials industry is no exception. At present, however, Africa has few research institutions able to meet most of the developmental and technological requirements of the industry. For the research function to make a just contribution, it must itself be given due priority in national development plans, and operate within a framework of clear-cut goals. Research programmes should emphasize standardization and the acquisition of technical know-how through pilot projects. As the construction and building materials industry is still in many ways a fledgling sector without substantial funds, it should be able to have recourse to specialized research units which can provide the necessary logistical support. Such research centres can also contribute significantly to the technical and professional training requirements of the industry.

7. Construction-related services

80. The availability of certain vital sen/ices which entrepreneurs in the construction sector cannot afford to integrate into their own operational structures, has a significant impact on efficiency. The majority of construction projects in this region being small-scale and fairly dispersed, there is a need for various technical support services. The concentration of manufacturing plants, and the rational location of repair and maintenance services and building materials depots, should also be promoted within the framework of sectoral development strategies. Governments, financial institutions and construction-industry organizations can make a significant contribution to the development of new methods that would benefit entrepreneurs.

81. Major projects like dam construction, which are normally labour-intensive, require experts for on-site evaluation, supervision and overall management. Most entrepreneurs apparently lack sufficient funds to

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engage experts on a permanent basis. It would be to the advantage of the industry if governments undertook to either provide such services directly, or help procure them for the industry. Some countries such as Kenya, Swaziland and Togo have already taken steps in this direction. However, much remains to be done.

In those countries where such services do not as yet exist, we recommend that they be set up.

82. The industry is also in dire need of improved equipment-leasing services. Enterprises offering various kinds of equipment and machinery on lease would help alleviate the costs many construction companies based in Africa incur on construction machinery (including soaring maintenance costs) as well as problems connected with the wide variety of machines used in construction works, the scarcity of personnel qualified enough to operate or maintain those machines, and the under-utilization of installed capacity. Such leasing arrangements would be more economical and efficacious than actual acquisition of the equipment. However, this business is not yet widespread in Africa, and where it exists, the cost is often beyond the reach of many entrepreneurs. Consequently, governments should endeavour to promote the establishment of companies to lease equipment to entrepreneurs at cheap rates.

83. A closely related problem to the one mentioned in the preceding paragraph is the lack of equipment repair workshops. This problem, which affects most African countries, has led to a situation where much of the equipment becomes useless after some time. Most of the construction companies are either too small to have their own maintenance sheds or do not possess a sufficiently large quantity of machinery to justify such an investment. In such circumstances, governments should make efforts to provide maintenance sheds at central sites for use by construction companies.

84. Finally, it is necessary to address the need for easily accessible building materials depots to streamline their distribution to various end-users. Often, these depots are located too far from end-users;

this problem is compounded by the fact that the building materials stock is not always suited to immediate needs, and by transportation and distribution problems. Governments should therefore endeavour to facilitate the establishment of distribution centres at suitable sites to promote efficiency in the industry.

8. Buildmg materials

85. The main objective of any building materials development strategy should be to ensure the availability of quality building materials at affordable prices. This would enable the construction sector to fulfil its just role in meeting society's shelter requirements. In a nutshell, such a development strategy should principally address the following imperatives:

(a) Promote local building materials production. Reliance on imported building materials should be reduced, especially as regards those building materials for which local substitutes can be developed or in respect of which there is a comparative advantage in local production. Raw material reserves that are viable in terms of available quantities should be utilized as much as possible for the benefit of the local industry;

(b) Decentralize production. Decentralization of building materials production should follow regional capacities. Decentralization has a number of advantages: reduction of transportation costs, promotion of technologies that are low on capital intensity (which favours low-income and-users), and enhanced community involvement;

(c) Give more priority to the building materials sector in development strategies. The building materials sector,which undeniably has a significant impact in the short-term on market patterns in the construction sector, should be given due priority in the development agenda. It is a sector which is intimately linked with the needs of the low-income segments of society. Sub-sectors such as burnt brick, roofing tiles (produced industrially and, on a smaller-scale by artisans), techniques for building on reclaimed land, timber, and chalk are an important aspect of the short-term development perspective. In the long term, local production of cement and clinker should be encouraged, subject to the necessary technical and economic viability criteria.