Ethiopia's parliament established an 18-member think tank focused on addressing the construction industry woes. Under the leadership of Hiyaw Terefe (PhD), the team is entrusted with the responsibility of identifying the construction sector's most pressing issues and devising practical solutions. This initiative was prompted by a series of four research papers that illuminated issues: the presence of unqualified professionals, the lack of bridge financing, reliance on imported raw materials, and deficiencies in existing laws.

At the launch session in Parliament last week, Tagese Chafo, speaker of the House, Chaltu Sani, minister of Urban & Infrastructure, and Wendimu Seta, state minister, were in attendance. They were joined by leaders from professional associations within the construction sector who presented papers, igniting a lively discussion on possible courses and strategies.

Esayas Gebreyohannes (PhD), a researcher involved in one of the papers and a member of the newly formed team, outdated construction standards on infrastructure projects have detrimental impacts. He said a 14-year-old building standard that persisted long after European countries had abandoned it, is exacerbating the design and construction defects.

Esayas urges lawmakers to craft contemporary regulatory standards, considering the ambitious projects outlined in the 10-year national strategy, including the construction of airports, millions of homes, and extensive roads. He called for the development of multipurpose water infrastructure projects to address scarcity.

He recommends conducting proper audits of road infrastructures, independent design reviews, contractor accountability, and incentivising the use of locally sourced construction inputs for long-term sustainability in the construction sector.

Ethiopia's construction sector has been on a steady upward trajectory for nearly two decades. It accounts for a quarter of the GDP while relying on imports for nearly a third of its inputs. However double-digit inflation over the past few years and an austere monetary policy cutting back on capital expenditures has weighed heavily on the industry.

The failures of the construction industry stem from a complex array of limitations beyond individual contractor shortcomings. Another member of the think tank, Wubishet Jekale (PhD) is a lecturer at Addis Abeba University and general manager of Jekale CM Consultancy (JCMC). His research identified a concerning trend for over eight years: a steady decline in yearly growth coupled with a gradual decrease in the frequency of new project announcements.

One of the key factors, according to the study, is the sector's heavy reliance on imported inputs, which is further compounded by foreign currency shortages. Contractors are failing to complete projects due to price variations and security concerns, leaving employers with unfinished projects and banks compelled to settle them with payment guarantees.

"It has created an interlinked systemic bottleneck," he said.

Wubishet outlined weaknesses in contract administration, which fail to address the unpredictability of prices or the interests of employers.  He recommends exploring alternative solutions where funds are voluntarily extended to cover damages or unforeseen project changes, even when not legally obligated.

Following the presentation of the papers, a panel discussion moderated by the speaker of the house ignited a lively discussion on possible courses and strategies.

Wendemu Seta, state minister for Urban & Infrastructure, said government contracts lack procurement procedures capable of attracting quality professionals. He said the approach towards giving out contracts to whoever brings the lowest price is unsuitable for the sector.