Public investment in infrastructure falls 10% – Savana

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Public investment in infrastructure falls 10% – Savana

2:40 CAT | 03 Sep 2019

File photo: Savana

Public investment in infrastructure has declined by 10 per cent in recent years, due to the economic crisis which has been plaguing Mozambique’s construction sector.

This is one of a series of conclusions drawn from a study commissioned by the Mozambican Federation of Contractors (FME) analysing the “current situation, demand and future perspective of the construction sector and its companies at the level of southern Mozambique.”

According to the study, firms among the 32 surveyed (five in Gaza, six in Inhambane, nine in Maputo province and 12 in Maputo city), have been hard hit by the current economic crisis, with import and purchase prices for construction materials rising “dramatically”. This has contributed to a decline in job opportunities and a consequent reduction of public investment in infrastructure.

The subject of tenders, and the awarding of tenders, appears as one of the main points of concern, and one which raises many questions, especially as companies find “some inability” to compete. Figures indicate that the companies surveyed took part in 370 public tenders, but only managed to attract 89 contracts, or just 24% – a response far below what could be considered reasonable.

The study concludes that companies need to identify the main reasons why their proposals are rejected, and get advice on submitting bids.
The construction sector is acknowledged as an area that employs many specialities, including bricklayers, hod carriers, plumbers and electricians.

With respect to licences and permit categories, of the 12 companies sampled, about 75% of them chose to maintain the highest classes and categories of permits, revealing an ability to survive even in the unfavourable scenario currently being experienced.

Despite the challenges and constraints faced by construction companies, there is optimism regarding their recovery, given the upward trend in the current macroeconomic indicators, which may significantly reduce the difficulties of companies regarding the cost of financing, purchasing and importing construction material and equipment

Source: Savana