Digitalisation and Construction Industry in Ghana

In Part 1 of this article, I placed the spotlight on what former President Mahama’s 24-hour economy policy agenda could mean for the construction industry and how this could be the game changer for our development and economic growth given the pivotal role the industry plays in our national developmental agenda.

I also declared my intention to dedicate part two of this article to the equally compelling digitalisation agenda advocated by Vice President Bawumia. Dr. Bawumia, who is the Flagbearer of the NPP for the 2024 elections, has abundantly made known his digital transformation agenda as he bids to lead the country as its next president. He has at any given opportunity trumpeted his vision to make Ghana the digital hub of Africa. His vision is to see a Ghana where we leverage technology, data, and systems for inclusive economic growth. A Ghana where we bridge the digital divide, and apply artificial intelligence for the transformation of health care, education, governance, manufacturing, and finance.

Modernising Ghana’s economy through digitilisation has enormous benefits for the country's development. One needs only to look at the benefits from the successful implementation of some initiatives such as the national biometric identification system, the property address system, digitilisation of government services at the lands commission, DVLA, passport offices, NHIS services, port operations, among others to appreciate the potential benefits of digital transformation. Its impact on the fight against corruption and increased government revenue due to the minimisation of human contact as much as possible in government business is often touted.

Digitalisation is one of the few subjects whose possibilities have been on the verge of being recognised globally. It is not and cannot be a mere cliché if one is minded to see its impact on the economy globally. Sometimes referred to as digital transformation, it is a set of changes associated with the application of digital technology in all aspects of human society. In another sense, it could also mean the ability to turn existing products or services into digital variants and thus offer advantages over tangible/traditional products and services.

A practical example of what this means is that, in the agriculture sector for instance, farmers can technologically produce in large quantities; digital sensors can be used to monitor soil moisture levels, enabling smart irrigation systems; real-time information on weather forecasts, market prices, and best agricultural practices can be obtained by farmers by introducing mobile applications; and traditional cash payment transactions could be replaced with digital payment systems, making it easier for farmers to receive payments and conduct transactions securely.

In healthcare, the accessibility and efficiency of health records and telemedicine can improve healthcare accessibility and efficiency. Mobile apps can provide health information, appointment scheduling, and medication reminders. Delivery of essential drugs through drones as we have seen happening in Ghana today. Remote monitoring and diagnostic tools can help reach rural areas with limited healthcare infrastructure.

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Like the call for the implementation of the 24-hour economy, the call for digitalisation could also be attributed to the urgency needed to close the country’s widening developmental gap. The call for digitalisation can be said to be driven by a combination of economic, technological, social, and environmental factors, all of which contribute to creating a more connected, efficient, and developed society. The impact of digitalisation on governance, the pharmaceutical industry, insurance industry, manufacturing industry, education, finance, healthcare, etc. could be the subject of another article but my interest in this article is the construction industry.

I made the point earlier on in Part One about the construction industry being the industry that plans, designs, erects, maintains, repairs, and demolishes buildings and infrastructure that are essential for the long-term socio-economic development of our country and for enhancing the quality of our lives as Ghanaians. It is therefore essential to our quest to improve our road, rail, and aviation networks; expand access to potable water; expand and upgrade power generation and transmission networks; expand access to internet and telecommunication; provide quality and affordable housing; improve health service delivery; and improve access to education. It generates employment and has backward and forward linkage effects on several other sectors of our economy.  So, if the construction industry is sick, then obviously the economy will be sick too.

The Ghanaian construction industry today suffers from a large number of local companies using obsolete construction equipment; high transaction costs, including delays in processing documents at agencies; high costs incurred through “additional corrupt charges”; and encumbrances in the issuing of building permits, title and deed transfers of land.

There are several cases of non-adherence to the Public Procurement Act, 2003 (Act 663) as Amended (with Act 914); limited access to finance; cumbersome bidding procedures; delayed payment to contractors; limited supply of specialised craftspeople; and shortage of building materials.  The high and rising prices of electricity and materials; access to finance for developers and contractors; high interest rates; unfavourable and unstable foreign exchange rates are all teething problems in the industry.

The construction industry must be at the forefront of embracing this idea of digital transformation. Globally, the adoption of new technologies and digital tools has revolutionised the way construction projects are planned, designed, built, and managed.

Digitally transforming the Ghanaian construction industry will have noteworthy impacts on the industry and, of course, the economic and social growth of the country. Ghana’s infrastructure development gap can only mean a strategic focus on infrastructure development for any serious government. The required increase in project delivery would necessitate accelerating the planning, design, and execution of infrastructure projects.

Digitalisation stands as a catalyst for that effect, which contributes greatly to societal progress. Improving access to finance and credit for construction firms obviously will be a ‘cascading effect’ of a digital economy. Issues of performance measurement and improvement can be better addressed through digitalisation of the activities of the industry. This would yield benefits like improved operational efficiency, higher revenue, lower expenses, reduced costs, and construction time.

Digitalising processes such as procurement of contractors and consultants, award of contracts, certification of work, and payment by integrating project management software with accounting software would reduce corruption thereby reducing costs, promoting value for money, and ensuring regulatory compliance. As digital technologies continue to evolve, the impact of digitilisation on construction is expected to remain profound and transformative.

The complicated and heavy workload nature of construction projects requires the involvement of many stakeholders; most of these projects even require global connectivity, which could also be achieved by digitalising the construction processes and activities. This improves the sharing of knowledge among professionals globally as innovative practices are adopted. Another important reason why the construction industry requires digitalising its operations is how susceptible it is to disruptions, including natural disasters and unforeseen events. Digitalisation is hence really needed, as it promises to enhance resilience by enabling remote project management, real-time monitoring, and rapid adaptation to changing circumstances.

A holistic approach to transforming policy, people, and processes is needed to achieve digital transformation and a high level of digital technology implementation. A study of the construction digitalisation roadmap of countries such as the UK, Singapore and New Zealand leaves one in no doubt as to the crucial role of Government through its policies, roadmaps, incentives, investments and training.

The UK government for instance supported digitalisation through multiple fundings of digitalisation initiatives. The Singapore government supported the industry with various funding schemes for digitalisation efforts. In most countries where the construction industry has taken on board the digital transformation agenda, the government is seen to have taken the lead in driving this growth, showcasing its initiatives and encouraging the private sector to follow the path.

This is why I think Dr. Bawumia’s vision should excite construction industry stakeholders. Unfortunately, in his lecture dubbed “Ghana’s Next Chapter: Selfless Leadership and Bold Solutions for the Future” delivered at the University of Professional Studies (UPSA) on 7th February 2024, much was not said regarding how he intends to extend the digitalisation agenda to key sectors like construction.

This is important because as stated earlier, the economy fails if the construction industry fails. It is critical to improve the performance of the construction industry in Ghana to enhance the quality of life of the citizens. Our country deserves a construction industry that performs at the optimum level concerning all relevant parameters at the project, company, and national levels.

I have argued in Part One of this article that any government that seeks to improve the standard of living of its people cannot prioritize other sectors of its economy over its construction sector. I did shed light on some key prospects for adopting the 24-hour economy strategy in the Ghanaian construction industry.

Here in part two of the article, I have sought to highlight how digitalisation of the construction industry can serve as a powerful force capable of addressing longstanding challenges in the construction sector.

From improved design and construction resource management to financing and payment issues, to compliance and enforcement, to probity and accountability, to quality of work and sustainability concerns, the benefits of digitalisation to the industry are enormous. As we strive for economic advancement, it is crucial to recognise the pivotal role of the construction industry.

Former President Mahama and Vice President Bawumia have presented compelling visions for a prosperous Ghana, and it is our collective responsibility to ensure that the construction sector plays a central role in realising these aspirations. As they go on the campaign trail and lead the efforts to write their respective manifestos, I will charge both gentlemen to have a clear road map for how they would digitalise the construction sector in Ghana and ensure we operate 24 hours. Having explored the possibilities and complexities of the two presidential campaign themes, I can certainly say that intersecting the two would hold immense potential for transforming the construction industry of Ghana and, for that matter, the Ghanaian economy. 

But really as we stand now, although both policy ideas are good and could potentially benefit the economy, they are views of two different flagbearers for two rival political parties in Ghana. How then can we merge the two to make the economy better? I dare say that there is a need to consider this possibly in a national development plan where the two candidates are acknowledged for these two great policy ideas.

The author, Emmanuel Adinyira is a Professor of Construction Project Management at KNUST, Kumasi Ghana. He is a Fellow of the Ghana Institute of Construction, a Professional Member of the Ghana Institution of Surveyors, and a Professional Engineering Technologist with the Institution of Engineering and Technology, Ghana.

The efforts of Mr. Samuel Aklashie, his Teaching and Research Assistant in providing some of the research the article is based on is acknowledged.