The African Development Bank Group (AfDB) on Thursday said the delivery of projects by Malawi contractors is hampered by their inadequate capacity to complete the assignments on time.
AfDB resident representative Dr Andrew Mwaba also cited inadequate knowledge on rules and procedures by implementing agencies as well as consultants and contractors and the lack of qualified procurement and financial management specialists.
â€œThis ultimately leads to delays in project implementation and is costly on the part of government through fees charges on undisbursed amounts and also on the part of the contractor having to pay workers and hired equipment over longer periods of time.
â€œThe ultimate loser is the ordinary Malawian, the intended beneficiary of these interventions,â€ he said at the opening of a two-day business opportunity forum and competiveness seminar in Blantyre.
The bank has a number of projects that are done by a majority of local contractors as well as foreign.
A local contractor, Newton Kambala, who is also managing director of Mkaka Construction Company, acknowledged the lack of capacity by local contractors, but argued that the AfDB insists on getting a guarantee or a performance bond from commercial banks other than insurance companies.
â€œFinance has always been a problem for contractors because the banks will always want an equivalent amount of a guarantee,â€ he said.
Kambala hoped that the pan-African bank will give solutions on what the local contractors can do to build the much-needed capacity, stressing that the forum is long overdue and has come at the right time.
Mwaba observed that one of the bankâ€™s core mandates is to develop local industries of regional member countries through strengthening and preparing small and medium enterprises (SMEs) to respond effectively to business opportunities in Africa using local content.
He noted the bank called for the forum to enhance capacities of firms, contractors and suppliers that are operating in Malawi to access and development business opportunities through the bank and other multilateral development banks operating in Africa and internationally through competitive bidding.
The bank hopes the forum will provide the contractors and suppliers a platform to hold â€œfrank dialogue and exchangeâ€ on the challenges faced and also find an opportunity to ensure that the job is better done.
During the forum, a number of papers will be presented and, among others, is by the president of Malawi Institute of Procurement and Supply (Mips) Emmanuel Chisesa who will speak on procurement and business opportunities and Ministry of Finance official on taxation and tax waivers processing.