An ambitious government plan to transform the construction industry has elicited caution from observers, who warn the systemic challenges highlighted in a series of reports from the Ministry of Urban and Infrastructure must be addressed before the industry can hope to meet success.
The Ministry of Urban and Infrastructure launched its ambitious five-year construction industry transformation initiative (CITI) on Tuesday August 12, 2025, highlighting a policy shift in a bid to address inefficiencies ranging from project mismanagement and delayed material delivery to inadequate human resource planning.
Officials who were involved in crafting the initiative stressed that the industry’s protracted challenges stemmed from decades of fragmented oversight and lack of standardized project management practices.
Presenting the highlights of the four documents, prepared collaboratively by federal and regional authorities alongside the Ethiopian Construction Association, Yetmgeta Asrat, a state minister for Urban and Infrastructure, provided a comprehensive assessment of these challenges and outlined strategies to tackle them.
The Ethiopian Construction Industry Transformation Initiative documents include Medemer in Construction, The Ethiopian Construction Industry Transformation Concept Map, Competitiveness and Evaluation Framework and Ease of Doing Business Framework.
Yetmgeta noted that 35,000 businesses in the construction industry employ up to a 10th of the country’s productive labor force and contribute up to 20 percent to GDP.
“Looking at the industry’s current situation, there are many widely acknowledged challenges. The extent of the problem can be interpreted in different ways. While some downplay the seriousness of the issues, others say there are only limited challenges. But in reality, there are deep and structural problems within the industry,” he said.
The State Minister underscores that these problems are preventing the industry from performing, growing, and contributing to the economy and national development at the level it should.
“Our domestic contractors, consultants, and companies are not expanding and competing abroad in African markets as they should; instead, they are struggling even within the country. This shows that there are issues that must be addressed,” said Yetmgeta.
Among the most pressing concerns are project preparation and capital management.
Those in attendance participating in the panel discussion agreed that past projects suffered from insufficient planning of budgets, human resources, and material needs, resulting in delays and cost overruns. Stakeholders emphasized the need for thorough assessments before execution to avoid repeating mistakes.
A second challenge outlined at the discussion touched on coordination across federal, regional, and local levels.
Fragmented communication between administrative units has hindered timely approvals, land allocation, and oversight, delaying critical project milestones, according to participants. The initiative seeks to strengthen these links through specialized councils and working groups at multiple governance levels.
According to industry stakeholders, the construction industry also faces human resource and skill gaps. The documents stress that without robust training and engagement with academic institutions, construction projects risk underperformance. By integrating university partnerships, the initiative aims to equip the workforce with modern technical expertise, so that teams can meet both execution and innovation demands.
Accountability and transparency have also emerged among the central concerns. Historical mismanagement and unclear oversight structures have eroded efficiency and trust within the sector, participants said.
“The problems that plagued the sector was not the failure of any single actor; they were systemic,” said an engineer commenting on the laid out transformation plan.
Officials at the launch also emphasized on that innovation and knowledge sharing as tools to overcome persistent inefficiencies. High-performing teams are to be recognized, and best practices documented, while ongoing projects will serve as benchmarks for performance and resource management.
Experts stress that the initiative’s success will hinge on adherence to the principles of proper project preparation, intergovernmental coordination, human resource development, and robust accountability mechanisms deemed as essentials to prevent cost overruns, delays, and operational gaps that have long undermined the sector.
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