1How are Small-scale Building Contractors in Ghana’s Construction Industry faring in 2024? The research findings discussed in the article were conducted by a team of experts in the field.
Small-scale Building Contractors in Ghana’s Construction Industry
Small-scale building contractors (SSBCs) dominate Ghana’s construction industry, making up over 90% of the market and significantly contributing to the country’s GDP Ahadzie, D.K. (1995). “Factors affecting labour productivity in the construction industry in Ghana: The perception of consultants and contractors”, Journal of the Building and Road Research Institute, Vol. 3 (1/2), pp. 22-32. Their impact is particularly pronounced in local government areas and rural communities, where they are vital for driving growth and creating jobs.
However, despite their importance, SSBCs in Ghana face various challenges that hinder their performance. Understanding these challenges and identifying strategies to overcome them is crucial for their survival and success in 2024 and beyond.
Government Fiscal Policy: A Double-Edged Sword
The Ghanaian government’s fiscal policies significantly impact the performance of SSBCs. Access to finance, interest rates, timely payments, and government policies themselves can either support or hinder their operations. Delays in payments for completed projects, bureaucratic hurdles in accessing funds, and the lack of readily available credit facilities create substantial obstacles for SSBCs Ahadzie, D.K. (2011). “A Study of the Factors Affecting the Performance of Contractors Working on KMA Projects”, Journal of Local Government Studies, Vol.3 (1), pp. 50-65
. These issues can lead to project delays, financial strain, and ultimately, business failure.
The sources emphasize the importance of government intervention to streamline fiscal policies and create an enabling environment for SSBCs Asamoah, M.D. (2008). “An Assessment of the Performance of the Factors that Affect the Performance of Construction Projects in Ghana: Class D1 Building Contractors”. This includes ensuring prompt payment for completed projects, simplifying bureaucratic processes, and facilitating access to affordable credit. By addressing these fiscal policy challenges, the government can create a more stable and predictable operating environment for SSBCs, enabling them to focus on delivering quality projects and growing their businesses.
Strengthening Internal Capacities: A Path to Resilience
Beyond external factors, SSBCs often face internal challenges related to managerial capacity . Carrillo, P. (1994). “Technology transfer: A survey of international construction companies”, Construction Management and Economics, Vol. 12 (1), pp. 45-55. These include limitations in training for both proprietors and technicians, difficulties in delegating responsibilities, communication breakdowns, and a lack of professional engagement.
The research highlights the need for SSBCs to invest in improving their managerial skills and adopting modern management practices. This includes:
- Investing in training programs: Providing proprietors and technicians with the necessary skills in project management, financial management, and communication can significantly improve operational efficiency and decision-making. Cooke-Davies, T.J. (2002). “The real success factors on projects”, International Journal of Project Management, Vol. 20, pp. 185-190.
- Improving site organization and safety practices: Implementing clear protocols for site management, emphasizing health and safety standards, and fostering a culture of accountability can reduce accidents, improve productivity, and enhance the reputation of SSBCs.
- Embracing technology: Utilizing project management software, digital communication tools, and online platforms for procurement and collaboration can streamline operations and improve communication within the firm and with external stakeholders.
Looking Ahead: A Collaborative Approach to Success
The survival and growth of SSBCs in Ghana’s construction industry in 2024 hinge on a collaborative effort between the government and the firms themselves. While government intervention is crucial for creating a supportive fiscal environment and providing access to resources, SSBCs must proactively address their internal challenges related to managerial capacity. By working together, the government and SSBCs can ensure a vibrant and thriving construction sector that contributes to Ghana’s overall economic development.
- Divine K. Ahadzie, Ph.D., a researcher at the Centre for Settlements Studies at KNUST, has authored over 10 journal articles and 15 conference papers. He serves as a reviewer for several international journals and has consulted for the World Bank on construction industry projects.
Peter Amoah, MSc, is a lecturer in the Building Technology Department at KNUST and a fellow of the Ghana Institution of Surveyors. He is an active researcher and consultant with numerous publications in both local and international journals.
DANSOH AYIREBI is also a lecturer in the Department of Building Technology at KNUST and a consulting architect with Technobuild Design Consult. His research interests focus on strategic management, project performance, and innovation in construction. ↩︎
