Gape & Margaret - Botswana Construction WP No. 4 - tips

Conclusions and Recommendations4.1 Conclusionsi. The construction sector is generally liberalized. However, foreign firms whowish to participate in public projects can only register at the grade E categoryof the Public Procurement and Asset Disposal Board. Proof of certainemployment and obtaining resident permits are required for non-citizenemployees and self-employed people. With regard to the former, training andlocalization programs are also a requirement.ii.iii.iv.Delays in processing work and resident permits have been cited as a majorimpediment towards the use of non-citizen skills.Delays in land allocation have been experienced by both local and foreignfirms. These delays negatively affect the development of commercialestablishmentThere are no equity restrictions to foreign firms in the construction sector. Withregard to foreign commercial establishments, approval for use of tribal andstate land is made by the Minister responsible for land. The constructionsector is characterized by the presence of both small and large firms. Thelarger firms’ category (grade E) is dominated by foreign firms. Larger firms arebetter endowed in terms of equipment, machinery and skilled personnel andare more likely to engage in more complex and widely spread projects as wellas regional projects.v. Skills shortage is a major challenge in the construction sector. This is despiteGovernment’s increased efforts towards training in the sector. TheConstruction Industry Trust Fund also contributes towards training. However,areas such as engineering and architecture still need attention.vi.vii.viii.Lack of management information is a major cause of failure to estimate andcontrol costs. This is more prevalent in the smaller and medium sizedconstruction firms.Pursuant to the Government of Botswana’s citizen empowerment objective,citizen owned construction firms enjoy preferential treatment in terms ofaccess to finance through the citizen contractors’ fund, access to training oflocal craftsman, market access through the Reservation Policy and waiverson performance bonds with respect to certain categories of citizen contractors.Exports in the construction sector are negligible and have been the domain offoreign owned firms. In terms of costs, performance in the construction sectorhas not been impressive. Cost overruns are a common feature of publicprojects in particular but have also been exacerbated by construction booms.In terms of quality, it has been made difficult to measure this aspect due to theabsence of an industry wide quality assurance system.19