As part of initiatives set to improve the financial fortunes of stakeholders in the construction sector, the AGI is focusing on the development of construction indices, which address the under recovery of investments made in executing contracts, especially those awarded by the public sector.
This has commenced with the commissioning of a research study to establish possible ways of tackling the very high levels of under recovery the sector is faced with.
Under recovery of investments results primarily from delays in payments, especially on private sector contracts, which allow cedi depreciation and inflation to erode the value of the payments eventually made to contractors per the agreed contract terms.
In an interview at a stakeholder engagement organized by the AGI Construction Sector on Wednesday, in Accra, the Chairman of the Sector, Rockson Dogbegah noted that the final outcome of the research would bed that AGI has an enlightened position for any further deliberations with the government to address the problem.
Dogbegah said, “this would ensure that contractors in Ghana are duly compensated for services rendered, despite the fluctuations in the economic variables, such as depreciation of the cedi, which has impacted heavily on the delivery of construction services.”
Currently, the indices used for the sector do not compensate adequately in times when economy is faced with price and exchange rate fluctuations, hence affecting the capacity of the contractors to execute projects in a profitable and therefore sustainable manner.
Other initiatives that the sector seeks to embark upon include the adoption and implementation of health and safety policies for the sector as well as a mentorship programme that will foster knowledge transfer and sharing between experienced professionals and newcomers.
There will also be initiative to tackle the certification of trades professionals in the sector, such as the masons, tilers, and plumbers.
In its better years, the construction sector contributes about 14 percent of Gross Domestic Product (GDP) and has the potential for contributing even more to the nation’s economic growth with the right support from government.
By Joshua W. Amlanu