7 June 2024

Revitalizing South Africa’s Economy: Mxolisi Mgojo BUSA President, on the Critical Role of the Construction Industry and Infrastructure Development

By: Schalk Burger

Infrastructure was the heart of the economy, and the construction industry and the people working in it were important to deliver the infrastructure that would enable the country to become internationally competitive and excel, said business organisation Business Unity South Africa president Mxolisi Mgojo.

“The construction sector has been in decline since 2016, with a 5% drop in gross value add from 2016 to 2021. The economy only grew 0.4% during this period. Our economy cannot transform with such a low growth rate.”

However, statutory body the Construction Industry Development Board expected that increasing government investment in large construction projects would lead to strong demand for contractors, subcontractors and construction professionals over the coming years, Mgojo said.

“Research and consulting firm ConsTrack360 forecasts that the construction industry will see compound annual growth of 5.8% between 2023 to 2027, but how can the industry achieve this?

“The critical issues impacting on the sector include loadshedding and poor electricity infrastructure, transport and logistics, disruptions, rising labour costs, a shortage of skilled personnel, slow adoption of technology, delays, cost overruns and safety concerns,” he noted.

Further, following the recent peaceful elections in which no party won an outright majority, the country had a chance to set aside political and ideological schisms and collaborate to benefit the nation through the development of infrastructure, he added.

South Africa must build its communities, create jobs and enhance lives, but it was crucial that the right political decisions were made to enable this vision. The skills of people in the industry mattered.

“We are where we are today, with high levels of unemployment, inequality and poverty, because we have placed people in positions for which they are underqualified or unqualified.

“The opportunity now arises that, despite difference between parties, there is potentially enough agreement on the common good to achieve progress and address the political issues that are impacting on the growth and profitability of the sector. The growth of the construction sector relies heavily on a supportive environment,” said Mgojo.

Additionally, it was vital for the construction sector to operate effectively, because it could create jobs and train low skilled people, including through mentorship programmes, to construct the infrastructure and housing that would improve the overall living conditions of the population, he said.

This would promote sustainable socioeconomic development.

Large and multinational construction companies also had a role to play in development and supporting the growth of the construction sector in South Africa. Specifically, they could contribute to the growth and advancement of small businesses owned by black people.

Local businesses could use expert mentoring to professionalise and not only become small or medium-sized businesses, but large and global companies that were highly professional and successful, he said.

“Transformation and growth are interconnected. The development of infrastructure must lead to more jobs, deal with inequality and promote sustainable growth and development of the nation,” he emphasised.

Sign Up