Economic challenges

“High unstable business environment” is the description given to the Ghanaian construction industry by many scholars, particularly Ofori-Kuragu et al. (2016, p. 132). The construction industry in Ghana is characterized by high inflation, interest rate volatility, price fluctuation and in recent times, the poor power supply (dumso) has been studied regarding its dire consequences on the performance of the construction industry. Amoah, Ahadzie and Dansoh (2011) reported on the speculation by industry players about the inability of the government to create an enabling fiscal environment for the industry to thrive, knowing that the majority of firms are small- and medium-scale. For instance, Chileshe and Yirenkyi-Fianko (2012) evaluated risk factors affecting the Ghanaian construction industry. The study involved twenty-five risk factors as ranked by consultants, contractors and clients in the GCI. Inflation and price fluctuation were found as two economic risk factors which were ranked second and fourth, respectively out of the twenty-five risk factors of the industry (Chileshe &. Yirenkyi-Fianko, 2012).

In the real estate sector of the industry, Amos, Gadzekpo and Amankwah (2015) revealed challenges in housing finance which are attributed to causes such as unstable inflation, the depreciation of the cedi and high interest rates. The Bank of Ghana (2007) further laments the unstable macroeconomic environment and weak legal and regulatory environment as limiting the mortgage market in Ghana.

Project management and implementation challenges

Ghana’s development agenda is hinged on the local government system towards promoting infrastructure development in the country (Osei-Kyei &. Chan, 2016). To facilitate fair and even distribution of development across the country, the decentralization system of governance was born at the instance of the promulgation of the Local Government Act, 1993 (Act 462) and provided for by the 1992 Constitution of Ghana [Local Government Act, 1993 (Act 462)]. The local government levels, also referred to as the Metropolitan, Municipal and District Assembly (MMDA), have since been the fulcrum of development, receiving technical and financial support from the central government (CG), civil society organizations (CSOs) and donor agencies (DA) towards development. The main functions outlined in the Local Government Act, 1993 (Act 462), section 10, sub-sections 3a, i and ii entrust the responsibility of the overall local government development to the MMDA and through the Regional Coordinating Council (RCC), prepare and submit development plans of the MMDA and accompanying budgets to the National Development Planning Commission (NDPC) and the Minister for Finance respectively for approval, among other responsibilities, all geared towards infrastructure and economic development of the MMDA [Local Government Act, 1993 (Act 462)].

The infrastructure development process of the MMDAs is realized through the construction of health, educational and economic infrastructure project delivery. Construction project delivery (CPD) at the MMDA level has enormous benefits to the constituents or their citizens. The delivery of construction projects engages the majority of the small-scale building contractors (SSBCs) in the country who are noted to create jobs for the local community (Amoah, Ahadzie & Dansoh,

  • 2011) . Hence, to ensure projects initiated achieve the outlined objectives, project performance measurement is critical and this will be realized through effective monitoring and evaluation. In the management and implementation of projects, numerous challenges are encountered which are predominantly contractor- and process-related. Laryea (2010) reviewed extant literature regarding the challenges and opportunities facing contractors in Ghana and revealed that contractors face financial challenges due to delayed payment with no compensation. They also lacked managerial and technical capacity, there is a high level of competition resulting in an inability to secure jobs and the contractors have a poor attitude towards repayment of secured loans. Anvuur et al. (2006) also revealed the poor procurement practices arising from long post-award negotiations, prolonged evaluation processes and a dispute over land for development in the Ghanaian construction industry which has led to the insecurity of construction project funding. Additionally, in furthering the debate regarding the lack of transparency and corruption in the procurement process, Ameyaw, Mensah & Osei-Tutu, (2012) revealed dire procurement practices as posing a great challenge to the industry. These factors he outlines as low capacity levels of professionals on procurement, poor interaction between procurement bodies and the public procurement authority, non-adherence to procurement laws and the deliberate manipulation of the procurement process rendering the process non-competitive (Ameyaw et al.,
  • 2012) . Osei-Tutu et al. (2010) explored the corrupt related challenges in the construction industry which need immediate attention if the procurement process is to achieve its relevance in the industry. They found bid rigging, price differentials, collation, fraud and bribery as major corrupt procurement challenges faced

A review of the Ghanaian construction 159 in the construction industry. Similarly, Asamoah and Decardi-Nelson (2014) identified practices such as embezzlement, tender manipulation, favoritism and corruption which they describe as unethical practices in the Ghanaian construction industry.

Poor workmanship has been an age-old challenge in the Ghanaian construction industry. Baiden and Tuuli (2004) describe as persistent the problem of construction defects in the industry. Danso (2014) underscores the reality of poor workmanship in the Ghanaian construction industry. He further mentions the factors promoting poor workmanship and reports on the poor supervision and the use of the adulterated material as a major precursor to the poor workmanship challenge faced in the GCI. The challenge of poor workmanship is attributed to the poor competencies of labor and the wrong tools and equipment used on site which describes the level of competency, skill shortage and lack of human resources in the Ghanaian construction industry.

As reported earlier in this study, the Ghanaian construction industry is made up of nearly 90% of small- and medium-scale buildings and civil engineering contractors. This category of firms is confronted with managerial capacity challenges as reported by Amoah et al. (2011) when they studied the factors affecting construction performance in Ghana, highlighting the views of small- and medium-scale buildings and civil engineering contractors. Similarly, Ofori-Kuragu, Baiden and Badu (2016) report on the perceived inadequate knowledge of contractors in the application of the necessary management techniques in terms of the poor performance of the Ghanaian construction industry. Djokoto, Dadzie and Ohemeng-Ababio, E. (2014) and Ametepey, Aigbavboa and Ansah, (2015) in separate studies on barriers to sustainable construction in Ghana revealed a poor attitude towards change regarding construction methods and material use, hence the slow pace of the industry’s adoption of sustainable construction practices. Similarly, Fugar et al. (2013) studying the implication of the capital theory postulated the inability to embrace change in the GCI as a serious challenge. A recent study by Ametepey, Gyadu-Asiedu and Assah-Kissiedu (2017) on the cause-effect relationship of delayed local government projects in Ghana suggested that schedule delay is a common occurrence in the Ghanaian construction industry posing considerable challenges to the industry. These delays inevitably caused litigation and increased the final project cost. Additionally, Fugar et al. (2013) identified an insufficient financial resource, low level of worker mobility, the non-existence of appreciation of the workforce, the absence of investment in human resource development and low technology as dire challenges confronting the construction industry in Ghana.

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