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IOL News
a day ago
- Business
- IOL News
Navigating material shortages and price hikes: challenges for South Africa's construction industry
The site of the Mooikloof Mega-City residential development, which was launched east of Pretoria in 2020. Image: Jacques Naude / Independent Newspapers The construction and built environment buyers in South Africa are facing material shortages, steep price increases, and longer lead times for essentials such as steel, aluminium, solar panels, and electrical components. This was as the sweeping US tariffs are being felt across the globe, even affecting the construction industry at the southern tip of Africa. 'Although these are taxes on imports into the US, they have a ripple effect on local building costs as Chinese and other suppliers redirect their materials to markets without tariffs and disrupt our supply chains,' said Nolubabalo Tsolo, the executive director of the Association of South African Quantity Surveyors (ASAQS). She explained that contractors are struggling to manage the rising costs and add risk premiums to tenders. This means that projects from roads and bridges to schools and affordable housing risk exceeding their budgets. In addition, currency fluctuations are making dollar-priced imports even more expensive. All this puts strain on both public and private projects, with affordability and delivery timelines being reassessed. According to the organisation that represents members who have interests in the construction industry and built environment, amidst this uncertainty, quantity surveyors (QS) were playing a crucial role in stabilising the construction sector and keeping costs under control. 'We're the only profession specialising in the finances of the construction industry, also referred to as 'building accountants' (Bou-rekenaare) in Afrikaans.' The QS's initial estimate of the project cost-including labour, material, time, and profit-is based on information from the architects, engineers and other industry specialists. Tsolo said they look at the current market prices in construction, combined with historical data, as well as statistical forecasts and construction and material price indices. Ideally, the estimate also includes reserves for contingencies and escalations to cover unforeseen risks and costs during the project. However, ASAQS said National Treasury currently does not accept contingencies (typically 5% to 10% of project value) in the public sector, and QS have to formally request additional funds for unexpected costs. It's meant to boost accountability, Tsolo says, adding that this spelt onerous bureaucracy, which delayed construction and drove costs even higher. The ASAQS suggested responses to the tariff-related challenges in SA's construction sector that included embracing dynamic pricing strategies. Together with other industry bodies, the ASAQS said it is engaging with government departments for more flexible public sector procurement frameworks to address price volatility. But this requires regulatory clarity. 'The Standard for Infrastructure Procurement and Delivery Management stated that no escalations and contingencies should be included in the contract price (clause 14.5.9). 'However, when this regulation was replaced in 2019 with the Framework for Infrastructure Delivery and Procurement Management, it didn't mention the escalations and contingencies,' Tsolo said She said the sector must also focus on strengthening local supply chains. The government has been encouraging local manufacturing, but it should use the US tariffs to actively help local producers of construction materials, for example, through tax breaks and other incentives. This would reduce reliance on imports, she said. The executive director also suggested the training of QS on integrating global economic indicators into cost planning. ASAQS members were said to be already benefitting from evolving continuous professional improvement programmes and webinars that also tackle macroeconomic topics. Other industry bodies and partners could add value to this, she added. 'By building resilience, we intend to lessen global economic shocks on the local construction sector,' Tsolo said. 'Quantity surveyors are central to this, ensuring that construction projects remain feasible, efficient, and financially sound, even in uncertain times.' Last month, the National Home Builders Registration Council(NHBRC) told this publication that whilst high interest rates inevitably impact the affordability, or lack thereof, and increase in home construction costs, as the NHBRC, they recognised economic and environmental realities and, accordingly, encourage alternatives such as the usage of Alternative Building Technology (ABT) and Innovative Building Technologies (IBT). The NHBRC said it is actively encouraging the usage and uptake of ABT and IBT, which are unconventional building methods or materials which are not covered by the National Building Regulations and Building Standards. These are assessed for fitness for purpose by Agreement SA, a certification body and custodian of IBTs in the country. Some of the notable advantages of ABT and IBT included reduced construction time, reduced life cycle cost, environmental impact, as well as innovative architectural options. Independent Media Property
Daily Maverick
7 days ago
- Business
- Daily Maverick
From security guard to manager: How one man's rise shows the power of education to liberate potential
Future success is linked to education. But with only four out of every 100 children who start school going on to get a degree within six years of matric, we urgently need new approaches to education and skills development in South Africa and Henley Business School Africa and its corporate partners are leading the way. Joseph Tsolo's life-altering transition from security guard to junior manager is a masterclass in perseverance and dreaming big. A beneficiary of a workplace skills development initiative, Tsolo's ebullient rise through the ranks also showcases exactly why South African corporates need to embrace more practical and effective ways to unleash the country's talent. 'Recognising my potential, my manager suggested that I enrich my practical experience by studying at a business school,' says Tsolo. 'I eagerly embarked on a journey of continuous learning, starting with a Higher Certificate in Management Practice (HCMP) and, a year later, enrolled on the diploma-level Advanced Certificate in Management Practice (ACMP). Graduating with my ACMP is a milestone that fills me with immense pride, as I was the first in my family to graduate with a diploma.' When one plus one adds up to thousands of capable managers Tsolo's is a story that would not have been possible without a very special partnership between his employer, Hollard Insurance, and Henley Business School Africa. Henley is a global business school, part of the University of Reading, with campuses in the UK, Europe – and Johannesburg – and it is the only international business school in South Africa that has developed a full ladder of accredited programmes (from NQF 5 up to NQF 8) that, while open to individual learners for 'open enrolment', can also be customised by clients like Hollard to make sure they are speaking directly to the needs of that organisation. 'This means that ambitious young South Africans like Tsolo, who have heaps of practical experience, natural talent, and enthusiasm but lack a formal qualification perhaps because they didn't have funds to study or had to get a job to support their families or didn't get a good enough matric to study further, have a second shot at getting the qualifications they need to get ahead,' says Jon Foster-Pedley, dean and director of Henley Business School Africa. Unleashing learning on a massive scale without losing the personal touch In South Africa, where there is already a backlog of education and dearth of opportunities, workplace learning on a massive scale, without losing the personal touch holds the key to unleashing the country's talent, believes Foster-Pedley. ' Research by the University of Stellenbosch's Nic Spaul l suggests that, on average, out of 100 children who start grade 1, just six will get some kind of qualification within six years of matric, and just four will complete a formal degree. This is woefully inadequate when you consider that in advanced economies like the UK or Finland, the numbers of formal degrees are above 50 per 100 children who start school. 'It is only through one-on-one partnerships between the likes of Henley and committed corporate citizens that we can start to change the odds decisively. Each year, Henley graduates upwards of 2,000 capable managers and leaders who go into South African workplaces to make a difference and add value. Many of these are through our Executive Education programmes.' A journey that starts with self-discovery and ends with practical application 'Like it or not, future success is linked to further education, and we need a revolution in how we think about education and training to ensure that working South Africans can make headway in a complexifying world,' says Jon Foster-Pedley, 'While getting a degree or a diploma is by no means the only route to success in life, studying further is correlated with productivity and economic growth, better social outcomes, and human happiness. ' However, it's not just about getting more people to get degrees, he cautions. It is also about changing the way people learn. Foster-Pedley points out that we live in a world that is dramatically different from the one for which most institutions of higher learning are geared to prepare their students. 'The latest Future of Jobs report from the World Economic Forum estimates that by 2030 almost 40% of skill requirements will have changed,' he says. 'That changes the way people think about how to study and gain the skills they need to get ahead. We need to make sure that the skills we are gaining will remain useful and we need to find ways to learn continuously so our skills can be refreshed.' Lolly Gwabavu, the group head of Leadership Development at Nedbank and a Henley client, believes that a key part of this lies in lifelong learning and developing yourself as well as your skills. She says that the starting point for any leadership development journey lies in personal mastery. After all, leaders must first understand how to lead themselves before they lead others. Through her work with Henley, Gwabavu is developing emerging leaders identified through the bank's established talent management structures. 'One of the positives about Nedbank is that we believe everyone has the ability to be a leader. Leadership is not a position or a title, it's a disposition.' According to Linda Buckley, Pro-Dean of Teaching, Learning and Student Experience at Henley Business School Africa, another vital element to improving educational outcomes in South Africa is to ensure that learning in the classroom is closely aligned with practice. All Henley students are given ample opportunity to apply what they are learning as they are learning it, with many clients coming up with highly innovative solutions to achieve this. For example, one client, Bryte Insurance, through the Bryte Academy, recently created a shadow board (NextCo) that allows young talent within the business to make a contribution at the highest level. Tebogo Baloyi, Head of HR at Bryte Insurance, explains: 'We want diverse thinking in how we approach projects and strategic initiatives, and we want to hear the voice of our younger generation. So, NextCo is the practical experience that allows talented individuals to shine even more and get more exposure to projects. The shadow ExCo also sits like an ExCo; they are mapped to a portfolio and will be given real projects to execute as a team.' Employers recognise and value what Henley can do for them Henley's work in the skills development space is recognised globally. It's listed among the Top 30 business schools in the world in the Financial Times 2024 ranking of Executive Education programmes, scoring top in the world for Faculty Diversity in the same ranking. This makes Henley the highest ranked international business school with a campus in Africa, offering in-house corporate education to clients – an important third-party endorsement. Specific Henley programmes have also won awards. In 2022, Henley and Standard Bank won a talent development award from the European Foundation for Management Development (EFMD) for a customised leadership development programme called 'Acceleration', part of the bank's transformation strategy to develop African leaders. 'The impact of what we discovered was greater than we could ever have imagined,' says Standard Bank executive Mei-lene Els. Of 40 people on the 'Acceleration' programme, 13 were promoted into senior leadership roles. Of these, 40% were black women. 'Employers recognise and value what Henley graduates can do for them,' says Buckley. 'Education is ultimately about change, and South Africa's employers see first-hand how Henley's graduates are personally transformed and go on to transform their workplaces, creating new value. 'We make sure we stay up to date with emerging trends by continuously finding ways to adapt our programmes to the current business environment. This includes making use of virtual and augmented reality, experiential immersions and global perspectives. We aim to create new and unique simulations for current and future-focused learning that capture the rapid acceleration of today's technological world.' DM
