Ghana’s Construction Sector Continues To Be A Major Engine For Growth
Ghana’s growing oil and gas sector, investments in infrastructure, rapid urbanisation and a growing housing deficit continue to place demand on the country’s construction sector. However, the rising prices of both electricity and building materials pose long- and short-term challenges. Despite setbacks, the construction sector has continued to grow. According to the Ghana Statistical Service, a government body tasked with compiling economic data and indicators, construction was the largest subsector of industry in 2015, with a growth rate of 30.6% and a 14.8% share of GDP. It has grown consistently over the past five years, up more than 70% since 2010 and employing around 320,000 people.
Oversight & Regulation
A number of government actors are involved in Ghana’s construction sector. The Ministry of Water Resources, Works and Housing (MWRWH) is responsible for housing infrastructure, while the Ministry of Roads and Highways (MRH) directs civil infrastructure projects.
Although many qualified engineers, technicians and architects lead construction projects in Ghana, there is no overarching regulatory body, and there are few legal mandates or enforcement mechanisms currently in place for the industry.
Numerous stakeholders, including the Association of Building and Civil Engineering Contractors of Ghana, have insisted on the establishment of a dedicated regulatory body for the construction sector to ensure safety and increase professionalism in the industry. It could also serve as a watchdog for reported patronage during the awarding of government contracts. The Ghanaian government started exploring the option of establishing a Construction Industry Development Authority in 2014, but had not made significant progress as of late 2016.
Public-private partnerships (PPPs) continue to be important for the development of Ghana’s infrastructure, housing and commercial properties, especially given the country’s current budget constraints. Recently, the government outlined frameworks for more clearly articulating the roles of all stakeholders in approved PPPs.
In 2011, in the face of a $1.5bn infrastructure deficit, the government developed a National Policy on PPPs and an accompanying piece of legislation to provide legal guidelines and enforcement mechanisms to support the policy. The bill has already received cabinet approval but has yet to pass through Parliament. This policy framework and the bill will help clarify the roles and responsibilities of all parties involved in PPPs, and has the potential to ease the current constitutional requirement that all international transactions be ratified by Parliament. If this provision is eliminated, it will greatly reduce the cost and time it takes to develop a property.