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

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.