OVER VIEW OF THE

ZAMBIAN
CONSTRUCTION
INDUSTRY
By D. Chiponde
Country Overview

•Zambia lies in the Southern region of

Africa

•With a population of 13, 046,508

people

•Has the world’s second shortest life

expectancy, amounting to 41.2 years
(United Nations [UN], 2008).

•More than 70 ethnic tribes

(Muya et al. 2004; Central Statistics Office, 2011;

Kululanga, 2012)
Economic Overview

 Zambia remains one of the poorest

countries in the world, ranking 163 out of
177 countries on UNDP’s Human
Development Index (cited in Lindberg,
2009)
 In recent years, Zambia has experienced
decent economic growth, with real GDP
growing on average by 6 percent annually,
2005 – 2008.
 attributed mainly to rising copper prices
and foreign investments in the copper
sector.
Economic Overview

 copper remains unthreatened as Zambia’s main earner

of foreign exchange.

NB: Being a landlocked developing country, a well

functioning construction sector is of particular
importance for Zambia, as the country’s economic
activity is heavily dependent on the state of the road
network and other infrastructure.
Structure of the ZCI

According to Lindberg (2009), the construction sector is

made up of five sub-sectors;

1. Design – Architects, Engineers

2. Assembly – Contractors, builders, subcontractors and
specialists
3. Clientele – Public, Private and international
4. Manufacture -
5. Material supply -
Discussion

From the five sectors which one is the most important?

 Of prime importance to any construction industry is the
clientele who need to get value for money (Latham
1994; Chen 2012).
 In Zambia, the major client is the government
 Involved in:
1. Housing
2. Road works
3. Hospital Facilities
5. Schools etc
 Major Parties in the
Construction Process
Major parties involved in providing the clientele with
construction related services are;
 Local Authority
 Architects
 Engineers
 Surveyors
 Contractors
 Manufacturers and material suppliers
Nature of Construction
Projects
 Both new construction and rehabilitation works are
under taken.
 Labour intensive
 Examples include;

1.
2.
3.
4.
5.
Historical Context

Construction in Post Independence

 Very few construction firms existed
 Mainly owned by foreigners of British Origin
 Parastatals (government) were the major client
 Major parts of the country’s economy were
nationalized.
 Construction consequently faced further restrictions.
 Yet in the first 10 years after independence, the
industry experienced a boom.
Historical Context Continued

The 1970s
The Zambian economy took a steep turn for the worse due to:
 A drop in world copper prices to an all timelow in 1974.
 Poor management of the parastatals.
 The president could not adhere to the donors’ liberalization
reform demands, loans were handed out more restrictively .
 Thus the number of construction projects diminished

Government remained the main client for construction

projects
Historical Context Continued

The 1980s
 Zambian government funded construction projects in the 1980s
were characterized by;
1. Delayed
2. Unpredictable payments
 Poor market conditions(high inflation and prohibitions on
importing foreign exchange).forced firms to leave or file for
bankruptcy.
 New foreign and domestic construction were hampered
Historical Context Continued

The 1990s
 The poor state of the Zambian economy of the 1980s
lasted through the 1990s,
 Which was an equally bad, if not worse, period for
Zambian construction.
 In 1990s, the Zambian construction industry was
affected by a major change: the election of a new
government.
Historical Context Continued

1990s and 2000s

 The then president brought in economic reforms
 Major one being liberalization of the economy
 The parastatals were divided and sold off to private
investors in 1995, leading to mass layoffs and
skyrocketing interest rates.
 Parastatals construction and contracts disappeared
 Old construction firms disappeared – E.g. Lewis ktion
Historical context continued

 Reforms, however, encouraged international donors who

provided increasing amounts of construction funding.
 Private sector spending on construction slowly began to
increase.
 This, along with eased regulations, resulted in many new
domestic construction companies opening up in the late
1990s and early 2000s.
 Foreign presence in the Zambian construction industry
also increased, with an influx of investors from South
Africa, Italy, and China (Lindberg, 2009).
Challenges of the
Construction Industry
According to Uriyo et al. (2004), local
construction firms are incapacitated by
many challenges which include;

 Work opportunities
 Delayed payments
 Budget allocation
 Competition
 Shortage of technical skills
 Access to finance and credit
Challenges of the ZCI
Continued

 Procurement
 Poor Performance
 Registration Procedures
 Choice of technology and equipment
 Contractor Development framework
 Corruption
Discussion

Consider the following and predict the future of the

Zambian Construction Industry in the next 20 years

 Type building (Size, shape, materials)

 Opportunities for the design and construction teams
 Size and nature of construction organisation
 Innovation and technology
 Level of education
 Contribution to the national (Zambia) economy
 The End
Thank you