BGV in East Africa
In collaboration with Baugewerbliche Verbände (BGV) Sequa is planning the initiation of a partnership project between BGV and construction sector associations in selected countries of East Africa (Ethiopia, Kenya, South Sudan and Uganda). The project aims to contribute through professionalization of the East African partners to sustainable development of a competent, efficient and successful acting construction industry in East Africa. Within the EU project “Modernizing construction: Capacitating East African intermediary. Organizations in the Construction Value Chain,” Which has been implemented by the EU program Pro€invest form April 2010 to September 2011; co-operation with East African trade associations in the construction industry has already been started. This included the Construction Contractors Association of Ethiopia (CCAE), the Kenya Federation of Master Builders (KFMB) and the Uganda National Association of Building and Civil engineering Contractors (UNABCEC). BGV would like to continue working with the East African construction sector associations as part of a multi-year project and expand project activities to the newly established State of Southern Sudan. The project appraisal mission has to determine, whether a collaboration with East African construction sector associations in the context of a chamber and association partnership project can be recommended.
The appraisal mission took place from 24.4 until 10.05.2012 in Ethiopia, Uganda and Kenya. It was originally scheduled to visit Southern Sudan as well. Since the German Agency for Technical Cooperation (GIZ) in South Sudan advised against such an appraisal in current circumstances. The mission in South Sudan was cancelled. South Sudan remains, however, at the intended focus of the partnership project. Participants of the appraisal mission were Bettina Mueller, Sequa project manager; Heinz G. Rittmann, Deputy Managing Director of BGV, and Paul Wolterstorff, independent international consultant.
In the selected East African countries are characterized by severe social problems. Droughts (Ethiopia), civil wars (South Sudan) as well as ethnic and political tensions (Kenya) have hindered development. The poverty rate is still high (38.9% in Ethiopia, 38.1% in Uganda, 46% in Kenya and 50.6% in South Sudan). In addition, indicators related to child mortality, drinking water supply, access to sanitation facilities and provision of health services are worrying.
In the Human Development index (HDI) of the United Nations Development Programme (UNDP), Ethiopia ranked 157th out of 169 (2010), Uganda ranked 161th of 187 (2011) and Kenya ranked 147th out of 177 countries surveyed (2009). In contrast to this, significant potential for development exists. The economy is growing by five to seven percent in Uganda, by 4.2% in Kenya (2011) by about 8-11% in Ethiopia and by 4.2% (2010) in South Sudan. The discovery of oil deposits in Ethiopia, Uganda and Kenya creates economic optimism. Huge infrastructure projects, including road, pipeline and railway construction, have been initiated. Potentials in the construction industry are exceptional.
The participating countries recognize this potential and have come up with ambitious development strategies intending economic recovery and poverty alleviation with strong participation of the private sector. These development strategies are supported by the German side. Construction industry related topics fit to the intended support of sustainable economic development in Ethiopia, the development of renewable energy and energy efficiency in Uganda and the support of the water & sanitation sector in Kenya, Uganda and South Sudan. Close partnerships with local projects and programs are envisaged in this context. This concerns mainly ongoing chamber and association partnership projects as well as programs of the European Union (especially Crossroads in Uganda), the GIZ and the Kreditanstalt für Wiederaufbau (KfW). As these collaborations include energy-efficient construction and renewable energy projects, contributions to environmental protection and resource efficiency are very likely. The initiation of joint ventures with the German construction industry will add value to German development priorities.
Started in Ethiopia. CCAE was founded in October 1992 by 82 members. The current membership stands at 1,400 (a growth of 32,2% from September 2010 to September 2011). Members represent approximately 30% of registered contractors in Ethiopia. The Sector association is based in Addis Ababa, where five meeting and office rooms are rented. According to its business plan, CCAE aims to expand its existing membership. The organization wants to continue improving the legal and regulatory environment relating to procurement, contract management and execution of construction. It also wants to provide customer-driven services. For this purpose, seminars and workshops are conducted. Other objectives comprise the creation of improved access to jobs for members, expanded cooperation with stakeholders and delivery of sector information.
The units of the Association consist of the General Assembly, the Board and the Secretary. Roles and obligations of units are defined in the statutes and are presented in detail in the annual plan. The association is led by nine board members who are elected for a term of three years. A manager, seven full-time employees and four part-time staffs are employed as the executive of CCAE. In 2010 the Association earned a total annual income of approximately 60,000 EUR. Almost half of the revenue was generated from an annual trade show. Another third of the revenue is derived from membership dues. Expenses stood at 51,500 EUR. About 30% of current expenditures are salaries, approximately 15% rental costs and approximately 10% of costs for publications. CCAE thus has a solid financial base, but has little financial flexibility for the expansion of service provision to members.
The association has much strength. The public procurement and property Administration and other regulatory bodies recognize the association as a representative of the sector. CCAE is represented in the Board of the National Construction Authority, where it is engaged in Public Private Dialogue (PPD). The Association is well staffed and has significant capacity to implement the business plan. With 1,400 members CCAE represents 30% of all contractors in Ethiopia, an impressive ratio. CCAE also operates from a financially sound basis. In contrast to this, services delivery is still weak. Working groups focusing on specific construction sector topics are not in place yet. Contributions to standardization and certification are not sufficiently provided and regional issues are underrepresented. CCAE does not communicate a coherent corporate identity, has no monitoring and evaluation techniques (M&E) and con not implement all actions scheduled in the strategic work plan.