Construction sector signs major reform pact to tackle delays, cost overruns and governance failures

Tawanda Karombo

South Africa’s construction sector continues to grapple with project delays, cost overruns, skills shortages, and governance failures, according to the Department of Public Works and the Construction Industry Development Board (cidb).

Transformation in the sector also remains a key area of concern, officials noted following a two-day National Construction Summit attended by President Cyril Ramaphosa.

The construction sector, a major driver of economic growth and employment, contributed 2.5% to GDP in the second quarter and accounted for 35% of gross fixed capital formation, with total spending of R247 billion.

Construction industry stakeholders have now signed the 2025 National Construction Summit Declaration that commits stakeholders and players to “turbocharging the construction industry for improved performance and accountability” amid pressing challenges.

Among commitments related to governance is a framework to track performance across infrastructure clients, professional service providers and contractors, identifying non-performing clients, and enabling the blacklisting of contractors and professionals who fail to deliver. 

On the transformation front, stakeholders committed to train at least 1 000 contractors on construction management systems and 3 000 beneficiaries under the cidb Skills Development Standard in 2026. 

Dean Macpherson, the Minister of Public Works and Infrastructure, said these industry and governance commitments will “help restore confidence in the industry, which will support further investment and, most importantly, job growth” in South Africa.

According to the cidb, persistent job losses in the construction sector are reflective of slow recovery post-pandemic while informal employment remains a significant feature of the sector. 

It further notes regional disparities, with Gauteng driving growth while the Western Cape faces major contractions although overall, the sector remains vital to investment and infrastructure.

“Last year, the National Construction Summit tackled the construction mafia head-on, and we have since seen a meaningful reduction in construction site stoppages nationwide,” Macpherson said.

“This year, we aimed to build on this foundation to further support and grow the industry, and I have no doubt that the Declaration we’ve adopted will help us achieve that goal.”

On social stability and community participation, government and industry committed to full implementation of the Integrated Social Facilitation Framework (ISFF) across infrastructure clients by 30 June 2026.

The construction industry accounts for 6% of South Africa’s 11.5 million formally employed workers and 15% of the country’s 3 million informal sector employees. About 62% of all employees in construction are formerly employed while 38% of employees in the sector are informally employed.

There were about 100 000 jobs that were lost by the South African construction sector on a year-on-year basis by the end of the second quarter of 2025.

Sihle Zikalala, the Deputy Minister of DPWI, the latest Quarterly Labour Force Survey shows that the sector created hundreds of thousands of jobs in the third quarter of this year alone.

“The Integrated Social Facilitation Framework is our game changer. It will ensure fair, transparent localisation through subcontracting and create real employment opportunities for people living near projects. The Declaration turns these priorities into commitments that we will track and report on,” Zikalala said.

Last year, construction industry stakeholders deliberated on contentious issues such as safety on construction sites, extortion by construction mafia cartels, and crucial policies affecting the industry.

South Africa has made strides since the 2024 edition of the National Construction Summit held in Durban, with about 745 extortion cases having been reported since and 240 arrests made since November last year.

Bongani Dladla, CEO of cidb, said the Summit has been our chance to reset how South Africa plans, procures and delivers infrastructure and to move decisively from talk to action.

“That means building projects around people from the outset. If we get this right, the 2025 National Construction Summit Declaration will not sit on a shelf; it will be a working roadmap for higher-quality work,” Dladla said.

“By June 2026 we should demonstrate visible progress against the commitments made at this Summit.”

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