Thursday, September 22Inside Business Africa

‘Infrastructure investment as instrument to kick-start economies, job creation’

The construction sector may hold the key to kick-starting economies ravaged by the COVID-19 pandemic, the International Labour Organisation (ILO), has said.

The global body argued that investing in infrastructure can be among the first set of measures to kick-start economies, because governments can directly stimulate demand and job creation, compensating for the lack of private sector and household spending.

The ILO explained that governments can increase investments in infrastructure projects; particularly maintenance schemes because these usually involve simpler and quicker approval processes.

Technical Specialist, Employment Policy Department of the ILO, Maikel Lieuw-Kie-Song, submitted that construction has many advantages in national economic recovery programmes.

The sector, which according to him, is labour-intensive and employs a lot of people – 7.6 per cent of the global workforce can absorb workers from other sectors relatively easily, and projects can target regions and towns where the post-COVID recession is hitting hardest.

He maintained that there is also a good economic ‘trickle down’ effect from construction work – Local businesses benefit from large projects by supplying raw materials, transport, accommodation, food, and other goods and services.

Before COVID-19 struck, he said many construction workers were on short-term, project-based contracts, and so lost their incomes almost immediately.

“Those in or from developing countries, where the sector is highly informal, are likely to lack severance pay, unemployment insurance, or any other safety net. They need to get back to work as soon as possible.

“Equally, many enterprises in the sector, or those which rely on it, are small or medium-sized and at serious risk of bankruptcy if business does not return soon,” he said.

The right infrastructure projects, he said, can support not just employment and business activity, as they can also provide the foundations for the ‘build back better’ approach of inclusive and sustainable development that policymakers are talking about, if they include environmental objectives, and improve access to basic services for the poor.

He advocated the right government policies and programmes to engage this potential booster to get economies and workforce going again so that the construction sector can not only restart but protect its workers and prevent any virus spread.

Source: Guardian

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