…As approved plans in Windhoek record 12 month surge
By Hilary Mare
THE number of building plans approved within the Windhoek municipal area by February 2018 recorded a 12 month growth, signalling green shoots in a previously ailing construction sector.
The surge represents a 13.0 percent rise to 2068 units, compared to a contraction of 33.7 percent in the prior year.
Simonis and Storm Securities Junior Analyst, Indileni Nanghonga highlighted that the building plans approved remained positive for three consecutive months, suggesting a slight recovery in building activities within the centre of the country, this despite the fact that plans approved declined on a monthly basis to 152 units compared to 170 units recorded in January.
In addition, the number of buildings completed also extended its three month positive growth rate, registering a 91.6 percent in February 2018 compared to a contraction of 1.6 percent in the prior year.
On a monthly basis, buildings completed increased by 60.4 percent, extending the increase of 49.0 percent recorded in the prior month.
“Our view is that the upward trend seen through the 12 month average suggests a slight stabilisation in construction activities within the city, albeit at a slower pace.
“Looking at overall construction in the country, we should expect that the African Development Bank (AfDB) project financing loan, amounting to N$4billion over the next two years to fund agricultural mechanization, road and rail infrastructure and schools renovation programs to support growth in construction activities over the next two year,” Nanghonga said.
Late last year, Finance Minister, Calle Schlettwein had noted that government was keen to roll-out interventions to revive the pace of activity on some of the on-going major capital projects, while opening up opportunities for new ones.
“We have progressed on assessing Public Private Partnerships (PPP) options for some potential infrastructure projects. We will aggressively seek to harness PPP opportunities where the potential exist, while keeping fiscal risks in check,” said the minister while addressing the construction industry at its annual general meeting last October.
Prior to this, government had already announced the planned establishment of an Infrastructure Fund at the Development Bank of Namibia (DBN) that will be ring-fenced to finance the completion of on-going capital projects and as a conduit for financing long-term infrastructure projects.
This Fund will run in parallel with the AfDB infrastructure loan facility.
“Amendments to domestic asset requirements from the current minimum threshold of 35 percent to 45 percent by October 2018 will release substantial amount of money into the economy. The private sector should work together with the Government to identify listed and unlisted investment opportunities and the Ministry of Finance avails itself of such result-oriented engagements.
“We should make concerted efforts to bring about effective SOE reforms and better utilization of state assets as a means of enhancing investment in infrastructure development, and more importantly, the Public Procurement Act offers opportunities for local procurement and tendering. This policy space should be utilized optimally to the benefit of the local economy. I have invited the Construction industry to propose workable options for local procurement. This proposition is now overdue,” explained Schlettwein.
Last year, the Construction Industries Federation (CIF) of Namibia said that 63 percent of businesses had either closed down, are dormant, or have scaled down operations drastically due to reduced government funding.
“Between 1 September 2016 and 31 March 2017, a minimum of 30 percent of the workforce was retrenched,” the federation said in a statement.
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