Contractors want enabling business environment

Increase in building materials affecting contractors
Increase in building materials affecting contractors

Some building contractors in Tema on Tuesday called on the Government to provide private businesses an enabling environment to help them achieve their financial target or break even.

According to the local contractors, the recent hikes in prices of building materials especially cement and iron rods among others was putting a toll on their businesses as they end up making losses on estimates they had already presented to clients.

Mr Simon Sawer Tetteh, General Manager of Sawer-Nanor and Sons Company Limited (SNS) speaking to the Ghana News Agency in Tema on the effect of the increase said an increase in prices sometimes leads to altercations.

He said sometimes some clients opposed moves from the contractor to adjust the estimate to meet the current price changes.

Mr. Tetteh said, “whenever the exchange rate increases, it affects both the contractor and the client because as prices of materials shoot up on the market, it forces us to change estimates within the short possible time, and sometimes clients we build for think that the contractors in Ghana are money conscious”.

He said because most of the building materials were imported, an increase in the exchange rate for the US Dollars turn to push up the prices for the materials therefore the need for government to create the enabling environment to ensure the stability of the cedis and resolve other business-related issues.

He added that the current situation where prizes of the materials kept increasing several times in a year was a big worry for them indicating that more must be done by authorities to ensure that prices remain stable at least for the year to enable businesses and individuals to plan.

He said, “Currently, it is very difficult, we did some work and the best we could do is to break even. The most affected is the private sector, when dealing with international organizations you have to keep on explaining yourself especially when your budget does not meet the overall cost of the particular project”.
According to him, the situation sometimes led to incurring losses adding that high taxation was another problematic issue affecting Ghanaian private companies especially the ones into construction as such costs must be pass onto the client leading to the high cost of building.

He said to beat an unforeseen increment in materials, clients must be prompt in paying for projects the moment estimates were given while contractors must work day and night a situation that could also affect family relationships.

The SNS General Manager appealed to the government to consider empowering and supporting local companies to manufacture the majority of the various building materials in Ghana as a way of mitigating such hikes and cushioning the construction industry as they employed a lot of the youth.

“We have over one million housing deficits in Ghana, these calls for the government to look at the building industry by providing resources for contractors who are building especially affordable houses for people.

“Having some tax incentive for companies producing materials such as iron rods, cement, tiles, PVC pipes, electrical cables, and paints reduce the cost of production and subsequent prices of materials,” he said.

Mr. Isaac Asare Bediako, a subcontractor of Nickjoe Company Limited, also reiterated the negative effects of increment in prices of building materials as he said it was difficult to purchase all needed material at a go.

Mr Bediako said buying in a bit and pieces due to high prices, slowed the construction process and affect the cost of building, “so we try to factor everything into our estimate, an estimate can be more or less but it is always better to estimate a bit higher to cater for the financial losses”.


Spread the love