Staff Reporter
AS Namibia’s national elections approach, the Construction Industries Federation of Namibia (CIF) says it remains important to consider the future of the country’s economy and employment opportunities, particularly within the construction sector.
Bärbel Kirchner Chief Executive Officer of CIF urged any new government and leading party – irrespective of who they are- commit to immediate and meaningful support for local contractors.
“The survival and growth of the sector, which is vital to job creation and the broader economy, depend on essential reforms, including the creation of a National Construction Council to regulate and oversee the industry. The CIF reiterates its earlier and repeated concerns that foreign contractor dominance threatens the survival of Namibian businesses. Unattainable financial prequalification criteria and unrealistic technical requirements continue to exclude local contractors from projects financed by both national and international institutions. This results in limited revenue circulation within the Namibian economy, lost opportunities for skill development, and increased dependence on foreign expertise,” Kirchner said.
She added that the construction sector has been in a sharp decline over the past decade, with its contribution to Namibia’s GDP falling from 3.1% in 2016 to just 1.4% in 2023.
“Employment within the sector also plummeted from 63,000 workers in 2016 to an estimated 28,000 today, with many of these workers now employed in the informal sector. This downward trajectory is a direct result of the government’s failure to support local contractors. Over the years, numerous large-scale projects have been awarded to foreign firms, often at the expense of local businesses,” Kirchner said.
Examples of this she said, includes the Ogongo-Oshakati pipeline replacement project, valued at N$237 million, which was awarded entirely to foreign contractors, including China Gezhouba Group Company Ltd, China Jiangxi Economic and Technical International Corporation Ltd, and New Era Investment Pty Ltd in joint venture with CCCC Origin Water Construction Group Co. Ltd.
“Despite the proven capacity of local contractors, no local firms were awarded significant roles in this project. Additionally, no specific local content allocation was made for this project,” she said.
Similarly, the Karibib-Usakos road rehabilitation project, funded by Germany’s KfW Development Bank and valued at N$372.6 million, went to Zhong Mei Engineering Group, which recently faced legal action after worker died on one of their sites. Local subcontractors, including Ino Investment Holdings CC, Tangeni OM Trading CC, West Trading CC, and Alugodhi Trading CC, were involved but were restricted to 25% of the total contract value. The remaining 75% of the project was awarded to the foreign contractor.
Kirchner said that these foreign-led projects have resulted in billions of Namibian dollars flowing out of the country, depriving local contractors of vital opportunities to grow and contribute to national development.
“The construction sector can once again become a key driver of Namibia’s economy, but only if the incoming government commits to creating an environment where local contractors can thrive. The establishment of a National Construction Council is the first step toward turning this situation around,” Kirchner said.
