Map 10.2 shows South Africa, a nation located at the southernmost end of the continent of Africa. South Africa is bordered by countries like Namibia, Botswana, Zimbabwe and Mozambique all in the north. Lesotho and Swaziland are sovereign nations located in South Africa. The South Atlantic Ocean and the Indian Ocean borders South Africa in the south. The country has an overall
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Prince Edward Islands not shown.
Map 10.2 Map of the Republic of South Africa.
coverage of 1,219,090 square kilometers which comprises 1,214,470 square kilometers of land and 4,620 square kilometers of water (The CIA World Factbook, 2016). The middle-income country according to the World Bank has the biggest stock exchange market in Africa and among the top twenty countries in the world. The country is also blessed with abundant natural resources, well-developed financial, legal, communications, energy and transport sectors.
Construction industry outlook of South Africa
The impact of the South African construction industry on the economy cannot be overstressed. Indeed, the South African Construction (2016) acknowledges the significant contribution of the construction industry to employment and growth in South Africa. Pillay and Mafini (2017) aver that the construction industry is the major contributor to the South African economy. Statistics South Africa (2016) cited by Pillay and Mafini (2017) indicates that the construction industry contributes significantly to job creation for the majority of the working population in the country and also to the GDP of the country. The Construction Industry Development Board (CIDB) (2016) reports that nearly 50% of the national capital
Monitoring and evaluation: African experience 143 and about 4% of the nation’s GDP is as a result of the contribution of the construction industry. It is, however, acknowledged that the key contributor to the expansion of the construction industry is the expenditure of government to the sector. This is evident in the government announcement in the 2015 budget statement to invest R813.1bn on major infrastructure projects in the transport, water and energy sectors (Nene, 2015). Also, the Human Settlements Vision 2030 and the 2023 mud-school building replacement project will ensure potential government capital injection into the construction industry (Report Buyer, 2016).
This notwithstanding, a depressed construction industry outlook (SA Construction, 2013; 2014; 2015; 2016), Pillay & Mafini (2017) identifies a supply chain management challenge in the South Africa construction industry. They further outline the challenges as skills and qualifications in the industry, procurement practices and systems, supply chain integration, supply chain relationships and the structure of the construction industry. Windapo and Cattell (2013) also identified twelve challenges influencing the performance, growth, and development of the South African construction industry through an extensive literature search. The study subsequently through validation established that out of the twelve challenges, increase in the building materials cost, access of affordable mortgage/credit, high interest rates, high rates of enterprise failure/ delivery, capacity and performance and the mismatch between available skills and required skills as most significant challenges facing the South African construction industry (Windapo &. Cattell, 2013).
In a related study, Windapo (2016) again opined the shortage of skilled or qualified tradesmen such as plumbers, electricians and carpenters in the South African construction industry but was quick to blame the shortage on the lack of high-quality basic education and certification, the compulsory certification of tradesmen and the ageing workforce. Another challenge facing the South African construction industry is the poor quality of work output (Windapo, 2016). According to Bowen, Edwards and Cattell (2012), the perception is that corruption in the South African construction industry is widespread. These corrupt practices common to the industry include conflict of interest, tender rigging, fronting and kickbacks. Khumalo, Mashiane and Roberts (2014) also revealed poor profitability as a major challenge when they studied the harm and overcharge of a precast concrete product cartel in South Africa. The phenomenon was attributed to the excessive cost overruns (30%) and change orders (8.3%) on precast concrete projects in South Africa. The South African industry outlook presented above shows the critical need for the industry to put structures in place to regulate practices in order to ensure that the challenges are mitigated for effective project implementation. The challenges observed in the South African construction industry are similar to those experienced in the Ghanaian construction industry.