An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials

Assefa Tekla Bedada

doi:doi:10.11648/j.ajcbm.20230701.11

| Peer-Reviewed

An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials

Assefa Tekla Bedada

Published in American Journal of Construction and Building Materials (Volume 7, Issue 1)

Received: 16 December 2022 Accepted: 20 January 2023 Published: 4 February 2023

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

The construction industry differs significantly from other economic sectors due to a variety of distinctive features. Construction projects fail with a disproportionately high frequency in Ethiopia's construction industry today because it is fragmented and highly subject to political and economic cycles. However, due to the numerous risks inherent in how the sector functions, phrases like project business failure, collapse, and bankruptcy frequently used in Ethiopian construction. Assessing existing issues with Ethiopian construction project failure was the goal of this study. According to the study's findings, the main causes of current construction project failure are delays in clients' (donors') debt collections, border closures, heavy dependence on bank loans and payment of high interest on these loans, lack of capital, absence of industry regulations on building materials costs due to high neglect in free market and lack of experience in contract management. Finally, realities of the focus group showed that the construction project failure is valid and it represent a step forward in the way of construction industry development in Ethiopia. The results of the research also recommended to that there be an urgent need for an independent and responsible body to take the lead of the adoption and the application of the ethical code and more efforts need to done to help construction sectors to understand and realize the importance and role of ethics professional in construction industry. Education and mandatory training programs can conducted for stakeholders about the content of the market inflation and rising Cost of Building Materials to control. Media's role and research development also is very important. Based on these findings, approvals to all stakeholders are obey for National Trade Industry Regulations that currently work in Ethiopia construction industry.

Published in	American Journal of Construction and Building Materials (Volume 7, Issue 1)
DOI	10.11648/j.ajcbm.20230701.11
Page(s)	1-6
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2023. Published by Science Publishing Group

Keywords

Construction Project Bankruptcy, Construction Industry, Failures, Obstacle

References

[1]	Jin, X., Zhang, G., Liu, J., Feng, Y., & Zuo, J. (2017). Major Participants In The Construction Industry And Their Approaches To Risks : A Theoretical Framework. Procedia Engineering, 182, 314–320. Https://Doi.Org/10.1016/J.Proeng.2017.03.100
[2]	Chukwu, D. U., Anaele, E. A., Omeje, H. O., & Ohanu, I. B. (2019). Adopting green building constructions in developing countries through capacity building strategy : survey of Enugu State, Nigeria. 4, 1–13.
[3]	Gebreegziabher, L., & Hailesilase, N. (2016). Identifying Causes Of Building Construction Site Accidents In Tigray Region, Towards A Safe Construction Industry Identifying Causes Of Building Construction Site Accidents In Tigray Region, Towards A Safe Construction Industry. 1–6.
[4]	Merga, A. (2006). JMU Scholarly Commons Emergency Recovery Project, Impact Assessment Report-Ethiopia.
[5]	Malek, J., & Kaouther, M. (2014). Destructive And Non-Destructive Testing Of Concrete Structures. 8 (4), 432–441.
[6]	Nations United. (2015). THE CHALLENGE OF LOCAL GOVERNMENT FINANCING IN.
[7]	Terfassa, B. (1989). RECENT TRENDS IN THE DEVELOPMENT OF. 139–156.
[8]	Falcioni, R. (2015). Industry : Transforming A Nation. In Ethiopia’s Construction Industry: Transforming A Nation (Vol. 14th).
[9]	Worldbank. (2022). Global Economic Prospects (Issue January).
[10]	Anne, S. (2002). The Culture of Power in. In SARAH VAUGHAN AND KJETIL TRONVOLL.
[11]	Adimkew. (2020). Assessment Of Challenges And Problems Faced By Small, Medium And Micro Enterprise Contractors In Addis Ababa Public Construction By Master Of Science Addis Ababa Science And Technology. Thesis.
[12]	IMf. (2016). The Federal Democratic Director For The Federal Democratic Republic. 16.
[13]	Worldbankgroup. (2014). The Growth Acceleration And How To Pace It.
[14]	Gudeta, E. D. (2020). School Of Graguate Studies The Contribution Of Construction Industry To The Economic Growth Of Ethiopia The Contribution Of Construction Industry To The Economic Growth Of Ethiopia.
[15]	Ethiopia, P. (2021). Ethiopia 2030 : The Pathway To Prosperity.
[16]	Worldbank. (2021). GDP Growth Annual % Of Ethiopia Data. Annual Report, 19.
[17]	GBN. (2018). Partnership Ready Ethiopia : Construction Current Situation.
[18]	Amnesty International: Country Profile Ethiopia 2019, 8 April 2020; Beyond Law Enforcement, Human Rights Violations by Ethiopian Security Forces in Amhara and Oromia, 29 May 2020.
[19]	World Bank. 2013. World Development Report 2014: Risk and Opportunity-Managing Risk for Development. Ethiopia,: World Bank.
[20]	Vašková M. 2013. “The Impact of Global Recession on Earnings and Income Inequality in Visegrad Countries.” Comparative Economic Research, Sciendo 16 (3): 7-28.
[21]	DFID. (2007). GROWTH BUILDING JOBS AND PROSPERITY IN DEVELOPING. 1–25.
[22]	Shiferaw, A. (2017). Productive Capacity And Economic Growth In Ethiopia. 34.
[23]	Karas, M., & Reznakova, M. (2017). Predicting The Bankruptcy Of Construction Companies : A CART-Based Model Predicting The Bankruptcy Of Construction Companies : A CART-Based Model. April. Https://Doi.Org/10.5755/J01.Ee.28.2.16353
[24]	Abebe, M. M. (2021). The Effect of Strategic Leadership on Organizational Innovation : in case of selected Digital Tech firms in Ethiopia (Issue September).
[25]	Salminen, J. (2017). What Is Business Failure ? A Philosophical Perspective What Is Business Failure ? A Philosophical Perspective. September 2012.
[26]	Driel, H. Van. (2019). Financial Fraud, Scandals, And Regulation : A Conceptual Framework And Literature Review. Business History, 61 (8), 1259–1299. Https://Doi.Org/10.1080/00076791.2018.1519026
[27]	Management, O. O. F. (2016). 2016 Draft Report To Congress On The Benefits And Costs Of Federal Regulations And Agency Compliance With The Unfunded Mandates Reform Act.
[28]	Walters, D. (2010). The Role Of Worker Representation And Consultation In Managing Health And Safety In The Construction Industry.

Cite This Article

Plain Text BibTeX RIS

APA Style

Assefa Tekla Bedada. (2023). An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials. American Journal of Construction and Building Materials, 7(1), 1-6. https://doi.org/10.11648/j.ajcbm.20230701.11

Copy | Download

ACS Style

Assefa Tekla Bedada. An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials. Am. J. Constr. Build. Mater. 2023, 7(1), 1-6. doi: 10.11648/j.ajcbm.20230701.11

Copy | Download

AMA Style

Assefa Tekla Bedada. An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials. Am J Constr Build Mater. 2023;7(1):1-6. doi: 10.11648/j.ajcbm.20230701.11

Copy | Download

@article{10.11648/j.ajcbm.20230701.11,
  author = {Assefa Tekla Bedada},
  title = {An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials},
  journal = {American Journal of Construction and Building Materials},
  volume = {7},
  number = {1},
  pages = {1-6},
  doi = {10.11648/j.ajcbm.20230701.11},
  url = {https://doi.org/10.11648/j.ajcbm.20230701.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajcbm.20230701.11},
  abstract = {The construction industry differs significantly from other economic sectors due to a variety of distinctive features. Construction projects fail with a disproportionately high frequency in Ethiopia's construction industry today because it is fragmented and highly subject to political and economic cycles. However, due to the numerous risks inherent in how the sector functions, phrases like project business failure, collapse, and bankruptcy frequently used in Ethiopian construction. Assessing existing issues with Ethiopian construction project failure was the goal of this study. According to the study's findings, the main causes of current construction project failure are delays in clients' (donors') debt collections, border closures, heavy dependence on bank loans and payment of high interest on these loans, lack of capital, absence of industry regulations on building materials costs due to high neglect in free market and lack of experience in contract management. Finally, realities of the focus group showed that the construction project failure is valid and it represent a step forward in the way of construction industry development in Ethiopia. The results of the research also recommended to that there be an urgent need for an independent and responsible body to take the lead of the adoption and the application of the ethical code and more efforts need to done to help construction sectors to understand and realize the importance and role of ethics professional in construction industry. Education and mandatory training programs can conducted for stakeholders about the content of the market inflation and rising Cost of Building Materials to control. Media's role and research development also is very important. Based on these findings, approvals to all stakeholders are obey for National Trade Industry Regulations that currently work in Ethiopia construction industry.},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials
AU  - Assefa Tekla Bedada
Y1  - 2023/02/04
PY  - 2023
N1  - https://doi.org/10.11648/j.ajcbm.20230701.11
DO  - 10.11648/j.ajcbm.20230701.11
T2  - American Journal of Construction and Building Materials
JF  - American Journal of Construction and Building Materials
JO  - American Journal of Construction and Building Materials
SP  - 1
EP  - 6
PB  - Science Publishing Group
SN  - 2640-0057
UR  - https://doi.org/10.11648/j.ajcbm.20230701.11
AB  - The construction industry differs significantly from other economic sectors due to a variety of distinctive features. Construction projects fail with a disproportionately high frequency in Ethiopia's construction industry today because it is fragmented and highly subject to political and economic cycles. However, due to the numerous risks inherent in how the sector functions, phrases like project business failure, collapse, and bankruptcy frequently used in Ethiopian construction. Assessing existing issues with Ethiopian construction project failure was the goal of this study. According to the study's findings, the main causes of current construction project failure are delays in clients' (donors') debt collections, border closures, heavy dependence on bank loans and payment of high interest on these loans, lack of capital, absence of industry regulations on building materials costs due to high neglect in free market and lack of experience in contract management. Finally, realities of the focus group showed that the construction project failure is valid and it represent a step forward in the way of construction industry development in Ethiopia. The results of the research also recommended to that there be an urgent need for an independent and responsible body to take the lead of the adoption and the application of the ethical code and more efforts need to done to help construction sectors to understand and realize the importance and role of ethics professional in construction industry. Education and mandatory training programs can conducted for stakeholders about the content of the market inflation and rising Cost of Building Materials to control. Media's role and research development also is very important. Based on these findings, approvals to all stakeholders are obey for National Trade Industry Regulations that currently work in Ethiopia construction industry.
VL  - 7
IS  - 1
ER  -

Copy | Download

Author Information

Assefa Tekla Bedada

Construction Technology and Management Department, College of Engineering, Assosa University, Assosa, Ethiopia

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Assefa Tekla Bedada. (2023). An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials. American Journal of Construction and Building Materials, 7(1), 1-6. https://doi.org/10.11648/j.ajcbm.20230701.11

Copy | Download

ACS Style

Assefa Tekla Bedada. An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials. Am. J. Constr. Build. Mater. 2023, 7(1), 1-6. doi: 10.11648/j.ajcbm.20230701.11

Copy | Download

AMA Style

Assefa Tekla Bedada. An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials. Am J Constr Build Mater. 2023;7(1):1-6. doi: 10.11648/j.ajcbm.20230701.11

Copy | Download

@article{10.11648/j.ajcbm.20230701.11,
  author = {Assefa Tekla Bedada},
  title = {An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials},
  journal = {American Journal of Construction and Building Materials},
  volume = {7},
  number = {1},
  pages = {1-6},
  doi = {10.11648/j.ajcbm.20230701.11},
  url = {https://doi.org/10.11648/j.ajcbm.20230701.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajcbm.20230701.11},
  abstract = {The construction industry differs significantly from other economic sectors due to a variety of distinctive features. Construction projects fail with a disproportionately high frequency in Ethiopia's construction industry today because it is fragmented and highly subject to political and economic cycles. However, due to the numerous risks inherent in how the sector functions, phrases like project business failure, collapse, and bankruptcy frequently used in Ethiopian construction. Assessing existing issues with Ethiopian construction project failure was the goal of this study. According to the study's findings, the main causes of current construction project failure are delays in clients' (donors') debt collections, border closures, heavy dependence on bank loans and payment of high interest on these loans, lack of capital, absence of industry regulations on building materials costs due to high neglect in free market and lack of experience in contract management. Finally, realities of the focus group showed that the construction project failure is valid and it represent a step forward in the way of construction industry development in Ethiopia. The results of the research also recommended to that there be an urgent need for an independent and responsible body to take the lead of the adoption and the application of the ethical code and more efforts need to done to help construction sectors to understand and realize the importance and role of ethics professional in construction industry. Education and mandatory training programs can conducted for stakeholders about the content of the market inflation and rising Cost of Building Materials to control. Media's role and research development also is very important. Based on these findings, approvals to all stakeholders are obey for National Trade Industry Regulations that currently work in Ethiopia construction industry.},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - An Analysis of How the Construction Business in Ethiopia Is Affected by the Rising Cost of Building Materials
AU  - Assefa Tekla Bedada
Y1  - 2023/02/04
PY  - 2023
N1  - https://doi.org/10.11648/j.ajcbm.20230701.11
DO  - 10.11648/j.ajcbm.20230701.11
T2  - American Journal of Construction and Building Materials
JF  - American Journal of Construction and Building Materials
JO  - American Journal of Construction and Building Materials
SP  - 1
EP  - 6
PB  - Science Publishing Group
SN  - 2640-0057
UR  - https://doi.org/10.11648/j.ajcbm.20230701.11
AB  - The construction industry differs significantly from other economic sectors due to a variety of distinctive features. Construction projects fail with a disproportionately high frequency in Ethiopia's construction industry today because it is fragmented and highly subject to political and economic cycles. However, due to the numerous risks inherent in how the sector functions, phrases like project business failure, collapse, and bankruptcy frequently used in Ethiopian construction. Assessing existing issues with Ethiopian construction project failure was the goal of this study. According to the study's findings, the main causes of current construction project failure are delays in clients' (donors') debt collections, border closures, heavy dependence on bank loans and payment of high interest on these loans, lack of capital, absence of industry regulations on building materials costs due to high neglect in free market and lack of experience in contract management. Finally, realities of the focus group showed that the construction project failure is valid and it represent a step forward in the way of construction industry development in Ethiopia. The results of the research also recommended to that there be an urgent need for an independent and responsible body to take the lead of the adoption and the application of the ethical code and more efforts need to done to help construction sectors to understand and realize the importance and role of ethics professional in construction industry. Education and mandatory training programs can conducted for stakeholders about the content of the market inflation and rising Cost of Building Materials to control. Media's role and research development also is very important. Based on these findings, approvals to all stakeholders are obey for National Trade Industry Regulations that currently work in Ethiopia construction industry.
VL  - 7
IS  - 1
ER  -

Copy | Download