1. SACPCMP
How the Construction Industry and Government can work towards creating a more sustainable delivery model for addressing the infrastructure backlog
An African Perspective
28 June 2016
Dave van der Merwe

2. Common goals & aspirations – so why a backlog?
Drive economic growth
Improve service delivery through infrastructure delivery
Facilitate job creation and alleviate poverty – development impact
Funds available for infrastructure and yet projects are lagging
© 2016 Deloitte Touche Tohmatsu Limited

3. Africa – the need for infrastructure grows daily1 2 3 4
The African population is projected to expand from around one billion in 2014 to almost two billion by 2040 (United Nations Population Division).
In 2010 there were 355 million people, or 34% of the population, considered middle class. By over half a billion Africans are projected to be middle class.
More than 200 million of Africans are aged between 15 to 24 years and that is expected to grow to 321 million by These younger Africans will play a critical role in the region’s economic development as they drive growth in the middle class.
The urban population in Africa is expected to grow from 38% in 2010 to 47% in Many of these urban areas will link up major populations and create sizeable markets and trade routes
While just 21% of Africa’s population access the internet, this situation is dynamic and developing fast. Telecoms growth in Africa over the past 5 years has been the fastest globally – with mobile growth enabling Africans to leapfrog poor landline infrastructure. 5
Unprecedented population growth
The promise of the growing middle class
Africa’s youth
Rapid urbanisation
Leapfrogging technologies
© 2016 Deloitte Touche Tohmatsu Limited
Source: “The Deloitte Consumer Review – Africa: A 21st Century View”, December 2014

4. Government & Industry at odds – yet they need each other
Multiple and complex issues abound in the African context
Significant levels of distrust
Projects are primarily government owned at 71 % but only 16% government funded (African Construction Trends 2015)
We need a paradigm shift. Here are some thoughts for both parties to embrace
© 2016 Deloitte Touche Tohmatsu Limited

5. Creating capacity Issue
Inadequate skills at artisan / trade skill levels / finishing trades
Lack of entrepreneurial skills and too few SMME contractors
Possible Solution
Skills development
Jointly fund investment into maths and science skills
Prioritize development of trade schools (incentivise trade zones)
Internships (articles for graduates) – greater focus
Small business growth
Entrepreneur development – maker spaces / innovation zones
Drive real change in SMME’s – a bedrock for future economic stability
Community involvement – key driver in modern metro growth
Skills development – supports growing middle class
Small business – satisfies young population
SMME’s – embrace supplier & enterprise development
Small business – similar to the German economy
© 2016 Deloitte Touche Tohmatsu Limited

6. Enhancing competence Issue
Inadequate competence / practical skills. Trained but no ability to apply
Experienced skills being lost through low growth or technology changes
Possible Solution
Structured skills transfer
Mentoring – but with real intent / outcomes based
Insights programmes – practical learning that links technology driven training with experience
Leveraging technology
Innovative e-learning (think Khan Academy)
Data analytics – rethink productivity
Encouraging competitive innovation (X-prizes)
© 2016 Deloitte Touche Tohmatsu Limited

7. Enabling environment
Issue
Significantly different regulatory and legislative issues
Inconsistent standards / infrastructure delivery approaches
Differing application of supply chain practices and increasing timelines
Possible Solution
Common enabling environment
Standardized capital project capability model (e.g. World Bank approach to projects, PIDA)
Single set of infrastructure principles (e.g. Millennium Challenge Corporation)
Program selection criteria / development impact objectives / implementation frameworks
Standardized infrastructure standards & approaches
Benchmark costs / user requirement templates / strategic briefs / repeat designs / modular construction /
© 2016 Deloitte Touche Tohmatsu Limited

8. Project pipeline visibility
Issue
Poor visibility of Government project pipelines
Conflicting agenda’s between service delivery & political masters
Long timelines between project and delivery
Possible Solution
Visibility of project pipelines
Multi-stakeholder engagement and collaboration (e.g. Phakisa)
Single data base with forward projections (e.g. World Bank)
Long term spatial & infrastructure planning
Long term capital planning framework – NDP with identified catalytic projects
Master plans with tangible projects
© 2016 Deloitte Touche Tohmatsu Limited

9. Additional sources - African Construction Trends 2015 - Deloitte
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