The construction industry in Zambia : opportunities and constraints under the structural adjustment programme and the enabling shelter strategy

Abstract

In October 1991 Zambia abandoned one party politics and embraced multi-party politics. Upon winning the elections, the MMD Government abandoned UNIP's commandist development strategies for Neo-Liberal ones, in an effort to salvage the ailing Zambian economy and ensure development sustainability. In adopting the Structural Adjustment Programme and its affiliated policy of Enabling Shelter Strategy, the Government hopes among other things to stimulate supply in the hitherto ailing construction industry. It is postulated that, by applying Neo-Liberal policies, an enabling environment for private investment can be created, where an efficient and high productivity private sector is the main provider of construction supply. This research aims at assessing the contributions made by the construction industry to the macroeconomic in Zambia, during the first five years of the Structural Adjustment Programme and the Enabling Shelter Strategy. To do this, the study analyses the adjustment and enablement conditionalities that have been placed on the Zambian economy and then analyses their net effect on the supply-side of the construction market. The contention of in this study is that although the Structural Adjustment Programme and the Enabling Shelter Strategy have made positive contributions to the Zambian Construction industry, there are, however, areas that still need reviewing and changing in light of the experiences of the last five years. The study was conducted using a survey research strategy, using both quantitative and qualitative analysis techniques. Primary data was collected during a field survey trip to Zambia between the 10th of October 1995 and 17th of March 1996. Secondary data on the other hand has mainly come from published literature, business journals, World Bank and IMF publications and Government publications and the media. The conclusions reached at the end of the study are twofold. First they validate the postulations that have been made in both strategies, that enabling policies do indeed break down the structural rigidities in the macro-economy and the construction industry. The result of which has been to promote international and local private participation at different levels in the Zambia construction industry. Secondly, they show that despite the easy entry of construction firms in the industry, especially in the informal sector, the formal construction sector labour market has, however, continued to reduce. The study further concludes that some of the (adjustment and enablement) conditionalites, and Neo-Liberal (Government) measures meant to promote the economy and the industry in particular have had the net effect of reducing construction demand, thereby reducing overall construction output in response to reduced demand. In some cases, however, the study found that surplus local supply was diverted to exports within the region.