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Competition and Complementarities in the Construction

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Harry G. Broadman - Africa\'s Silk Road China and India\'s New Economic Frontier (2007, World Bank Publications) - libgen.li
Morley, David - The Cambridge introduction to creative writing (2011) - libgen.li

Complementarities

Competition and Complementarities in the Construction
Industry in Africa Chinese and African Firms
Competition
Construction services procured by governments represent the largest share of the construction markets in African countries. Outsourcing and subcontracting services are the trend in this market. Based on the government procurement policies and the procurement policies of the donors, inline with the WTO Agreement on Government Procurement, the international bidding process is required for public construction projects in Sub-
Saharan African countries above certain threshold values of contracts.
Cost-efficient Chinese construction firms now dominate large-scale infrastructure construction projects in Sub-Saharan African countries by winning such international bids. The lack of capacity in this sector in African firms is undermining their ability to bid for implementation of the construction projects domestically and compete with international firms, particularly those from China. The majority of African firms are small and do not have the level of experience required to compete in large bids financed by multilateral organizations. In several cases they do not even fulfill the prequali- fication requirements requested for international bids and larger infrastructure projects. For example, firms in Tanzania cannot compete in the market above $2 million based on the WBAATI business case studies. Local firms cannot meet requirements for equipment, cash flow, and other items for this level of bid. African firms are unable to compete with the subsidies or other policies that may indirectly subsidize Chinese firms.
Complementarities
While international contractors from other regions such as European countries, Japan, and the Republic of Korea face serious setbacks from Chinese penetration in the construction market in Africa as they directly compete against Chinese firms in construction projects of similar scale, local African
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contractors are impacted somewhat differently. While facing competitive pressure as mentioned above, local African contractors still have some com- plementarities with Chinese firms. Based on the WBAATI business case studies, there seem to be three ways in which local African firms seek com- plementarities with Chinese construction firms in the construction industry.

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