Although it has only been a few months since the changes in government, Njombo Lekula, managing director of PPC Southern Africa, says that the current leadership is sending encouraging signals to the market, which bodes well for the future of the construction industry.
The President and minister of finance, respectively in the State of the Nation Address (SONA) and the Budget Speech, committed the government to uproot corruption and create a conducive economic environment. In his speech, President Cyril Ramaphosa said: “We are determined to build a society defined by decency and integrity, that does not tolerate plunder of public resources, nor the theft by corporate criminals of the hard-earned savings of ordinary people.”
“In economic terms, the current leadership is committed to creating a positive economic environment that will attract higher levels of investment,” says Lekula. “Admittedly, the budget will restrain government spending, which may result in an initial contraction in the economy. In my view, this period will not last long, especially if the leadership delivers on the pronounced commitments.”
Despite the budget being contractionary, Lekula highlights that a significant portion has been earmarked for investment expenditure as opposed to consumption.
“A cursory look at the budget shows that close to R50 billion is earmarked for infrastructure-related spending including on schools, industrial and public infrastructure, which will make a significant positive difference,” Lekula points out.
Another key message in the SONA was job creation for the youth, and Lekula explains that since the construction industry is labour intensive, it is well placed to absorb large numbers of youth.
“We must be an active partner and contributor to this national agenda. For example, bursary programmes at companies such as PPC should be expanded to cover more youth so that when the time to absorb them into our businesses arrives, they can become productive immediately. The industry must actively participate in the proposed Jobs Summit and help to shape the conversation”.
“In addition we need to support the government’s drive to expand tertiary education beyond the university system by providing meaningful alternatives such as artisan training. Through its world-class Technical Skills Academy (TSA), located in North-West, PPC has the capability to develop artisanal skills required for the cement industry and beyond,” he says.
Lekula further highlights the importance of supporting locally manufactured products, as touched on by President Ramaphosa. “Over the years several industries, including the cement industry, have increasingly faced unfair competition from imported inferior goods that are essentially dumped in our country. While we welcome competition, unfair behaviour has a negative impact on our economy, particularly on job security,” he says.
“As a beneficiary of government infrastructure spend, and a positive economic environment, there is also an opportunity for the industry to fully transform and become an active participant in building an inclusive economy. This we should do through such measures as procurement policies, skills development programmes and genuine partnerships with communities,” Lekula adds.
“Given all the positive commitments, and the confidence many investors have expressed, I am of the view that in the medium to long term, the construction industry is poised for growth and will benefit from the current changes,” Lekula concludes.
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Captions main image:
Njombo Lekula, Managing Director of PPC Southern Africa, is optimistic about the future outlook for the local construction industry
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