STATUS OF THE CONSTRUCTION INDUSTRY

The construction industry plays a crucial role in the economy because it cuts across a lot of the
sectors of the economy including housing, transport, water, agriculture, education, health, and
mining among others. The World Bank has found that the share of construction in Gross Domestic
Product (GDP) tends to increase with the level of per capita income in the first stages of economic
development and that when countries reach a certain level of economic development, the
construction output will grow slower than national output in the later stages of their development.
Furthermore, experience has shown that the development of a strong construction industry should
fully involve local firms and professionals as well as be supported by sector and macro-economic
policies geared towards stimulating growth and competitive positioning of the local actors.

The industry contributed3.0 percent of the Gross Domestic Product in 2010, and has been
contributing 2.8 percent every year since. The Construction Sector grew by 2.6 per cent and 7.1
percent in 2012 and 2013 respectively after reducing by 2.1 percent in 2011 (Annual Economic
Report 2013).

The participation of local industry players in most African countries is generally low. In the
Southern Africa Development Community (SADC) region, local contractors and consultants have
approximately 30 percent market share. South Africa is an exception as local contractors and
consultants have 85 percent market share. In Swaziland and Tanzania, local contractors and
consultants have 35 percent and 20 percent market shares, respectively.

In Malawi, the NCIC Register of Firms shows that over 95 percent of Civil, Building and Electrical
Contracting firms registered by April 2014 are Small and Medium Enterprises (SMEs) (MK5
million-MK500 million) with the remaining 5 percent in the MK1 billion and Unlimited
categories. Despite the heavy presence of local firms, participation in the construction industry in
Malawi is dominated by foreign firms which constitute only 2.8 percent of registered firms taking
85 percent of the construction business by value with the local firms scrambling for the remaining
15 percent
 THE CONSTRUCTION INDUSTRY ACT
The construction industry act was passed in Malawi parliament on 25 June 1996 and it was
published on 19 July 1996 signed by Dr Bakili Mulizi president of the republic of Malawi. This
act was passed in order to establish and give powers to the national construction industry council
of Malawi (NCIC). NCIC was established with the mandate to regulate, develop and promote the
construction industry in Malawi. NCIC’s role therefore is to create an enabling environment that
will not only facilitate the fulfilment of its mandate, b toe that will provide the drive and the
organisational structure to raise quality levels across the industry among local and foreign players;
thereby enhancing wider appreciation of the interests of the construction industry by all
stakeholders.

ARRANGEMENT OF SECTIONS

SECTION

PART 1 – PRELIMINARY
1. Short title and commence
2. Interpretation
PART II- THE NATIONAL CONSTRUCTION INDUSTRY COUNCIL OF MALAWI

3. Establishment of the Council

4. Composition of the Council
5. Disqualification from appointment to the Council
6. Vacation, etc., of members from office
7. Filling of vacancies on the Council
8. Co-opted persons
9. Chairman and Vice-Chairman

PART III-MEETINGS OF THE COUNCIL

10. Meetings of the Council
 PART IV-FUNCTIONS AND POWERS OF THE COUNCIL

11. Functions of the Council

12. Powers of the Council
13. Committees of the Council
PART V-FINANCIAL PROVISIONS
14. Funds, accounts and audit
15. Levy
16. Remuneration and expenses of members of the Council
17. Investment of surplus sums
18. Borrowing powers
19.Financial year of the Council

PART VI- REGISTRATION

20. Prohibit of carrying on business, etc
21. Council to maintain a register 22. Application for registration
23. Qualifications for registration
24. Certificate of registration
25. Minister to decide applications for registration
26. Appeals against refusal to register or removal from register
27. Striking off from the register

PART VII-MISCELLANEOUS PROVISIONS

28. Offences
29. Regulations
PART VIII- REPEAL AND SAVINGS

30. Repeal and Savings

An Act to provide for the establishment of the National Construction Industry Council of
Malawi, for the promotion and development of the construction industry in Malawi, for the
registration of persons engaged in the construction industry, for the co-ordination of training of
persons engaged in the construction industry and generally for matters incidental thereto
Or connected therewith
ANACTED by the Parliament of Malawi as follows-
PART 1- PRELIMINARY
1. This Act may be cited as the National Construction Industry Act, 1996, and shall come
into operation on a date to be appointed by the Minister by notice published in the Gazette.
2. In this Act, unless the context otherwise requires-
“Council” means the National Construction Industry Council of
Malawi established under section 3;
“financial institution” has the meaning ascribed thereto in section 2 of the Banking Act;

“foreign firm” means a firm operating in Malawi but belonging to a person who is not a
Malawian national and having fifty-one per cent or more of its capital originating from
outside Malawi.

“local firm” means a firm operating in Malawi having fifty-one per cent or more of its capital
originating from within Malawi but belonging to a person who is not a Malawian national;

“Malawian firm” means a firm operating in Malawi and having fifty one per cent or more of its
capital belonging to a Malawian national; “member" in relation to the Council means a member
thereof appointed or elected under section 4 (1);
“person engaged in Construction industry” means a contractor, consultant, material
manufacturer and materials supplier.

PART II- THE NATIONAL CONSTRUCTION INDUSTRY COUNCIL OF

MALAWI
3. There is hereby established a Council to be known as the National Construction Industry
Council of Malawi which shall be a body corporate having perpetual succession and a common
seal and shall, under that name, be capable of suing and being sued and of purchasing or
otherwise acquiring, holding and alienating moveable or immoveable property and, subject to the
provisions of this Act of performing all such acts as bodies corporate may by law perform.

4.- (1) The Council shall consist of the following members appointed by the Minister
three quarters of whom shall, save in the case of an ex officio member, be citizens of
Malawi-

(a) three members who shall be contractors nominated by the Master Builders’ Association
and the Malawian Building Contractors and Allied Trades Association;

(b) one specialized subcontractor nominated by the Master

Builders’ Association and the Malawi Building Contractors and Allied Trades Association;

(c) one quantity surveyor nominated by the Board of Architects and quantity Surveyors;

(d) one architect nominated by the Board of Architects and Quantity Surveyors;

(e) one engineer nominated by the Board of Engineers;

(f) one consulting engineer nominated by the Association of Consulting Engineers;

(g) two members representing material manufacturers;

(h) one member nominated by the Board of Registration of

Land Economy Surveyors, Valuers, Estate Agents and Auctioneers;

(i) two members from financial institutions;

(j) the General Manager of the Malawi Investment Promotion Agency or his representative;

(k) the Executive Director of the Malawi Chamber of Commerce and Industry or his
representative;
 (i) the Secretary for Works and Supplies or his representative;
(m) the Secretary for Economic Planning and Development or his representative;
(n) the Solicitor General or his representative;
(o) one person nominated by the University of Malawi; and
(p) one person of good character and good standing in the community.
(2) Members of the Council, not being members ex officio shall hold office for a period of three
years from the date of their appointment.
(3) Upon the appointment of any member to the Council, the
Minister shall cause notice of such appointment to be published in the Gazette and shall in
such notice specify the current membership of the Council resulting upon such appointment. 5.
Any person who-
(a) is declared bankrupt under any law in force in Malawi;
(b) is, under any law in force in Malawi, adjudged or otherwise declared to be of unsound
mind;
(c) has, within the past seven years, been convicted of an offence under any written law
punishable by a term of imprisonment
of six months without the option of a fine, shall be disqualified from being appointed as a
member of the Council.
6.- (1) The Council shall require a member to vacate his office if the council is satisfied that the
member-
(a) has become insolvent or has assigned his estate for the benefit of, or made a composition or
other arrangement with his creditors; or
(b) has been absent from three consecutive meetings of the Council, of which he has had
notice, without leave of the Council; or
(c) has been disqualified under this Act or any other written law from carrying on his
profession or trade; or
(d) has been convicted of an offence under this Act or any other written law relating to the
construction industry;
(e) has been convicted-
(i) within Malawi of a criminal offence; or
outside Malawi of an offence by whatever name called which, if committed within Malawi,
would have been criminal offence, And sentenced to imprisonment for a term of six months or
more without the option of a fine, whether or not such sentence has been suspended, and has not
received a free pardon; or
(f) is mentally or physically incapable of efficiently performing his duties as a member of
the Council; or
(g) has had a penalty imposed upon him under this Act by the Council with the approval of
the Minister.

(2) The Minister may-

(a) ask a member of the Council to temporarily resign if criminal proceedings have been
instituted against the member for an offence in respect of which a sentenced of imprisonment
for a term of six months or more without the option of a fine may be imposed; (b) suspended
from office a member of the Council against whom the Council has instituted an inquiry into his
professional conduct and while that member is so suspended he shall not carry out any duties as
a member.
(3) Where a member against whom criminal proceedings have been instituted is acquitted by a
court of law, the Minister may reappoint such a member to hold office in the Council.
(4) A member of the Council may resign his office by giving one-month notice in writing to
the Chairman of the Council.
7.-(1) On vacation of office by a member of the Council, the vacancy shall be filled by a person
appointed in accordance with section 4 (1): Provided that if the remaining period is less than six
months the Minister may decide not to have the vacancy filled until the expiry of the period.
(2) If any member of the Council is granted leave of absence by the Minister, the Minister
may, if he sees fit, co-opt a person who belongs to the same profession or calling as the member
who has been granted leave to fill the vacancy during the absence of the member. 8.-(1) The
Council may invite any person to attend any particular meeting or series of meetings of the
Council for the purpose of assisting or advising the Council in respect of any matter under
consideration by the Council.
(2) Any person invited pursuant to subsection (1) shall take part in the deliberations of the
Council at any meeting he attends but shall not be entitled to vote
9.-(1) The Council shall, from amongst its members, elect two members, who are not members
ex officio, to be Chairman and Vice-
Chairman
(2) The office of the Chairman or Vice-Chairman shall become vacant-
(a) if the holder resigns his office by giving one month notice in writing to the Council; or
if the holder of the office ceases to be a member of the Council; or if the Minister, at the
recommendation of the Council, so directs.
(3) Whenever the Chairman is absent or is for any reason unable to discharge the functions of
his office, the Vice-Chairman shall discharge the functions of the Chairman.
PART III-MEETINGS OF THE COUNCIL
10.- (1) Subject to this Act, the Council shall hold ordinary meetings for the dispatch of business
at least four times in each year.
(2) An extraordinary meeting of the Council-
(a) may be convened by the Chairman at any time;
(b) shall be convened by the Chairman within twenty-one days of the receipt by him of a
request in writing signed by not less than five members of the Council and specifying the
purpose for which the meeting is to be convened.
(3) At any meeting of the Council-
(a) the Chairman or, in his absence the Vice-Chairman, shall preside;
(b) in the absence of both the Chairman and Vice-Chairman the members present and
forming the quorum shall elect one of their number to preside;
(c) the quorum shall be formed by any ten members.
(4) (a) at any meeting, the decision of the Council on any matter shall be that of the majority
of the members present and voting at the meeting, and in the event of an equality of votes, the
Chairman or the person presiding shall have a casting vote in addition to his deliberative vote;
(b) a decision of the Council on policy matters shall be approved by the Minister.
(5) Subject to this Act, the Council may make rules for the regulation of its proceedings and
business and may vary, suspend or revoke any such rules.
(6) The record of any meeting of the Council shall be made available to any person engaged
in the construction industry and registered under this Act at all reasonable times at the offices of
the Council.
(7) No person shall have access to records of-
(a) a meeting of the Disciplinary Committee or any other committee of the Council; or
(b) the Council where the Council has resolved that it shall sit as a Committee.
(8) If a member of the Council has an interest, direct or indirect, in any matter before the
Council and is present at a meeting of the Council at which the matter is under consideration, he
shall as soon as practicable, disclose the fact and shall not take part in the consideration or
discussion of or vote on any question with respect to the determination of the matter;
(9) Minutes of every meeting of the Council shall be taken and kept by such officer of the
Council as may be designated in that behalf by the Council and shall be subject to confirmation
by the Council at the succeeding meeting.
PART IV- FUNCTIONS AND POWERS OF THE COUNCIL
(a) 11. The Council shall regulate the construction industry in Malawi and shall have the
following further functions- to promote and develop the construction industry in Malawi by
giving priority to Malawian firms;
(b) to facilitate Malawian firms to have access to resources for the development of their
operations;
(c) to promote, in liason with other bodies, both within Malawi
and elsewhere, proper developmental issues relating to the
Construction industry;
(d) to promote research, development and use of competitive local materials;
(e) to promote and facilitate, where possible, the construction of
affordable low-cost and medium-destiny housing;
(f) to promote safety standards in the construction industry; (g) to prescribe and vary the
categories for the registration of persons engaged in the construction industry;
(h) to recommend to the Minister conditions under which a foreign firm may register and
operate in Malawi;
(i) to keep and maintain a register for each category of persons engaged in the construction
industry;
(j) to conduct training, within Malawi and co-ordinate the training conducted by others, of
persons engaged in the construction industry; (k) to make available, from time to time, to
persons engaged in the construction industry published information, advice and assistance in
relation to the construction industry;
(l) to publish, from time to time, such technical and commercial information as it deems
necessary or expedient for the benefit of persons engaged in the construction industry;
(m) to review, from time to time, the process of awarding contracts; (n) to monitor and
evaluate, from time to time, the capacity and progress of persons engaged in the construction
industry;
(o) to encourage competition in the professions or trades of persons engaged in the
construction industry.
(p) to regulate the activities of the construction industry in Malawi through the concerned
Boards and Association;
(q) to co-ordinate construction industry councils within or outside the region;
(r) to standardize quality control, contract documentation, codes of practice, procurement
processes, legal contractual procedures in liaison with other organizations;
(s) to exercise disciplinary control over the conduct of any person engaged in the
construction industry and practicing in Malawi; and (t) generally, to perform such other
functions as the council deems necessary or expedient to achieve the objects of this Act.
12. for the better performance of its functions, the Council shall, subject to the provisions of
this Act, have power-
(a) to consider any matter affecting the construction industry and make representations
thereon to the Minister;
(b) to work together with other bodies in Malawi and elsewhere on matters affecting the
construction industry;
(c) to recommend the approval of institutions in Malawi and outside for the training of
persons engaged in the construction industry;

(d) to obtain information related to the industry from any person engaged in the construction
industry in Malawi;
(e) to obtain and collate all available information concerning existing and proposed projects
and advise persons engaged in the construction industry thereon;
(f) to employ such professional, technical and administrative officers, clerks and other
servants as it may deem requisite and lay down conditions of service for such employees;
(g) to pay any person in its employ such salary, wages or other remuneration as it may deem
fit, and to grant him such leave as it may deem fit;
(h) generally, to do such things as the Council may deem necessary or expedient to achieve
its objects under this Act.
13.-(1) The Council may establish any number of committees to carry out any special or
general functions determined by the Council and may delegate to any such Committee such
committee of the functions of the Council as the Council may consider expedient.
(2) The Chairman of the Council shall by reason of his office be a member of every
committee established under subsection (1).
(3) The Chairman of each Committee shall be elected by the Council from amongst the
members of the Council.
(4) (a) Each committee may, with the consent of the Council, invite any person to attend any
particular meeting or series of meetings for the purpose of assisting or advising the committee in
respect of any matter under consideration by the committee.
(b) Any person invited pursuant to paragraph (a) shall take part in the deliberations of the
committee at any meeting he attends but shall not be entitled to Vote.
(5) The Chairman of the committee may, with the approval of the Chairman of the Council
convene, at any time and place, a meeting of the committee of which he is chairman.
(6) The Council may, at any time, direct the Chairman of any committee to convene a
meeting of such committee and such chairman shall, as soon as is practicable, comply with such
direction. (7) Every committee shall keep minutes of its meetings and shall inform the Council
of its proceedings in such manner as the Council may direct.
PART V-FINANCIAL PROVISIONS
14.-(1) The funds of the Council shall consist of-
(a) such sums as may be appropriated by Parliament for the purposes of the Council;
(b) any fees payable under this Act;
© such other moneys and assets as may vest in or accrue to the
Council in the course of its functions;
(d) the levy imposed under section 15;
(e) such moneys or other assets as may accrue to, or vest in, the Council by way of grants,
subsidies, bequests, donations, gifts, subscriptions, rents, interest or royalties, from any person.
 (2) The Council shall keep proper accounts and other records relating thereto in respect of its
funds and shall in every respect comply with the provisions of the Finance and Audit Act.

(3) The accounts of the Council shall be examined audited annually by auditors appointed by
the Council and approved by the Minister. 15. The Council may, from time to time, by order
published in the Gazette, impose a levy on any person or class of persons engaged in the
construction industry under this Act and such levy shall be appropriated for the general
operations of the Council.
16. A member of the Council or of a committee shall be paid from the funds of the Council
such allowances as the Minister may approve and in prescribing the allowances, the Council may
make provision for the reimbursement of any reasonable expenses incurred by a member of the
Council or of a committee in connection with the business of the Council or the committee.
17. The Council may invest any sums which are not immediately required for its objects.
18. Subject to the provisions of section 32 (1) of the Finance and audit Act, the Council may
borrow either temporarily by way of overdraft or otherwise, such sums as it may require, for
meeting its obligations or discharging its functions under this Act.
19. The financial year of the Council shall be the period commencing on the date of
commencement of this Act and ending on the following 31st March, and thereafter it shall be a
period of twelve months ending on 31st March every year.

PART VI – REGISTRATION
20. – (1) No person shall carry on business in the construction industry in Malawi unless he
is registered under this Act.

(2) No person being registered under this Act shall carry on business of a category in respect
of which he is not registered.
(3) An employee of any person registered under this Act shall not be deem to carry on
business within the meaning of subsection (1) or (2) by reason only of his performance of his
functions as an employee. 21.- (1) The Council shall, for the purpose of this Act, keep and
maintain in the appropriate prescribed form, a register of persons engaged in the construction
industry.
(2) The register shall be in the custody of such officer employed by the council as the
Council may designate and shall be kept at the offices of the Council;
Provided that a copy of the register shall be kept at the Ministry Headquarters;
(3) Every person registered under this Act shall, after 31st March each year, pay to the
Council such annual fees as may be prescribed.
(4) No person registered under this Act shall obtain a commission or a contract before the
payment of the annual subscription fees.
(5) The Council shall, once in every year and as soon as may be convenient after 1st April,
each year, publish in the Gazette the names, addresses, qualifications, dates of registration,
category and other particulars of all persons registered under this Act.
22. An application for registration shall be made to the Council in such form as may be
prescribed and shall be accompanied by the prescribed fee.

23. – (1) The Council shall, before registering a person pursuant to an application made under
section 22, take into consideration the following-
(a) his capital and other financial resources;
(b) whether he owns land, buildings and machinery;
© his managerial, professional, technical and other personnel; and
(d) in the case of an individual, his qualifications and skill;
(e) whether he has vehicles, plant, implements, tools, instruments, fuels and other goods and
supplies for the unlimited categories; (f) any other requirements which the Council may
determine for each category necessary to enable him to discharge in a satisfactory manner, the
obligations which may reasonably be expected of or undertaken by a person belonging to the
category in respect of which registration is sought.
(2) (a) The Council may require the attendance of any party to, or any person interested in
or affected by, any matter before the Council and may demand the production of any document
or evidence to support the matter;
(b) Where any person whose presence is required is not present, or any document the
production of which has been demanded, is not produced, the Council may postpone hearing the
matter to give a reasonable opportunity for the appearance of such person or the production of
such document.

24.- (1) The Council shall issue a certificate to every person registered under this Act.
(2) The certificate issued under subsection (1) shall be valid from 1st April to 31st March of
the following year.

25. After considering an application the Council shall decide whether the application should
be granted or refused.

26. (1) A person aggrieved by-

(a) the refusal of the Council to register him under this Act for any reason; or
(b) the removal by the Council of his name from the register; may, after filing written notice
to the Council and within three months after the date on which notice is given to him by the
Council of the refusal or removal as the case may be, appeal to the Minister in such a manner as
may be prescribed.
(2) On hearing an appeal under subsection (1), the Minister may-

(a) dismiss the appeal; or

if he is of the opinion that the Council has not acted in accordance with this Act, make an order
that the name of the appellant be entered in or retained on the register; or
© refer the matter back to the Council for further consideration, and may make such other
order as he may deem fit.
(3) Any person aggrieved by the decision of the Minister may apply to the High Court for
review of such decision.

27.- (1) When a person registered under this Act has- (a) failed to renew his
annual licence; or
(b) ceased to carry on business in the construction industry in
Malawi; or
 © failed or ceased to have any of the things specified in section 23
(1) (a) to (f) inclusive; or
(d) undertaken work in a category other than that in respect of which he is registered; or
(e) been declared bankrupt; or
(f) become a person of unsound mind; or
(g) been found guilty of professional misconduct; or
(h) been found guilty of an offence involving dishonesty, the Council may call upon such
person to show cause why he should not be struck off the register.
(2) Where a person who has been called upon to show cause why he should not be struck off
the register fails to show such cause to the satisfaction of the Council, he shall be struck of the
register.

PART VII – MISCELLANEOUS PROVISIONS

28. Any person who contravenes the provisions of this Act shall Be guilty of an offence and
be liable to a fine of K20,000 and to imprisonment for a term of two years, and in case of a
continuing offence to a further fine of K2,000 for each day during which the offence continues.

29. The Minister may, with the advice of the Council, make regulations for carrying out or
giving effect to the provisions of this Act, and without prejudice to the generality of the
foregoing such regulations may-

(a) prescribe the fees payable-

(i) upon application for registration or renewal of registration;
(ii) for restoration to a register;
(iii) for any other matter under this Act;

(b) prescribe the forms required to be prescribed under this Act; and

(c) prescribe allowances to be paid to members of the Council and committees thereof in
respect of honorarium, traveling and subsistence allowances;
 (d) make provisions for the registration, control and regulation regulation of foreign firms
carrying on business in the construction industry in Malawi;
(e) make provision for the regulation and disciplining of persons engaged in the construction
industry in Malawi.
PART VIII – REPEAL AND SAVINGS

30.-(1) The Consultants and Contractors Act is hereby repealed.

(2) Any subsidiary legislation made under the Act repealed under subsection (1) in force
immediately before the commencement of this Act-

(a) shall remain in force unless in conflict with this Act and be deemed to be subsidiary
legislation made under this Act;

(b) may be replaced, amended or repealed by subsidiary legislation made under this Act.
 CONSTRUCTION REGULATION

On regulation, NCIC ensures that all Contractors, Consultants, Materials Manufacturers and
Suppliers and all stakeholders in the construction industry are operating within the governing rues
as stipulated in the National Construction Industry Act (NCI act) as well as codes of ethics (2009).
These include registration of firms with the council and commitment to professionalism and ethical
conduct by stakeholders.

In order to develop and promote the construction industry, NCIC undertakes various activities that
include but not limited to the following: advising the government on policy formulation related to
the industry that will facilitate growth and enhance professionalism, standardisation of
construction contracts and procedures, training man power both at the skilled and contract
management level, grading and monitoring of construction entities, creating an environment that
ensures quality of operations for all Malawian contractors and interaction and networking with
local and international organisations to promote research and information sharing on technologies
and best practices.

NCIC works in liaison with various stakeholders identifying the areas that need standards or
adoption of standards and coordinating the development of various standards for the construction
industry and promoting the use and compliance of standards. All organisations and stakeholders
that have observed any gaps in standards they are supposed to communicate to the council for
appropriate action. So far in liaison with Malawi Bureau of standards, the code of practice for
design loadings f buildings were created in 2010 and can be accessed on NCIC website. The
national building standards are currently under developments and it will be finalised soon, thus
according to NCIC.
Problem Statement

The inefficient and underdeveloped state of the construction industry has detrimental effects on
the achievement of national development goals. Some of the key weaknesses, problems and
constraints hampering the performance and development of the industry include:

i. Low capacity and capability of the local contractors and consultants due to weak
resource base and inadequate experience;

ii. Inadequate and erratic work opportunities as well as inappropriate contract

packaging of works which favour foreign firms in donor funded projects;

iii. Lack of supportive institutional capacity in terms of equipment for hire,

ownership and professional development;

iv. Lack of supportive mechanisms in terms of financial credit facilities for local
firms;

v. Unfavourable donor conditions which tend to marginalize local construction

enterprises;

vi. Unfavourable macroeconomic environment relative to neighbouring countries;

vii. Poor working environment, low standards of safety and occupational hazards
on construction sites;

viii. Weak and disintegrated policies, and regulatory framework; ix. Low
productivity and quality;
x. Low technological base and advancement and xi. Corruption and financial
mismanagement in public and private sectors.

1.5 Purpose of the Policy

Given the important role that the construction industry plays in economic development as
articulated in the Vision 2020, Government has developed a Construction Industry Policy to guide
the industry in terms of:

i. Strengthening institutional arrangements to enhance the capacity and

performance of the construction industry;
 ii. Improving participation of local firms- where the capacity of local firms is
developed and enhanced in order to be able to improve productivity and compete
effectively

iii. Enhancing standards enforcement and monitoring; iv. Advancing research and
technology that sustainably supports knowledge generation and retention;
v. Synchronization of different industry related acts and policies to enhance coordination.

The National Construction Industry Policywill ensure that all construction related issues are
effectively coordinated for an efficient and vibrant construction industry. The Policy will facilitate
and set principles, which ultimately will be used to set the long term direction for the industry.

2 BROAD POLICY DIRECTIONS

2.1 Vision
A dynamic construction industry that fosters economic growth and international competitiveness.

2.2 Goal
To develop an internationally competitive construction industry that will be able to undertake most
of the construction projects in Malawi and export its services and products and ensure value for
money to industry clients as well as promote environmental sustainability in the implementation
of construction projects.

2.3 Policy Outcomes

The following are the policy Outcomes of the National Construction Industry Policy:

i. Improved regulatory environment;

ii. Enhanced capacity of the local firms;
iii. Increased participation of local construction players in the international
market;
iv. Improved corporate governance in the construction industry;
v. Institutional framework strengthened; and
vi. Improved mainstreaming of cross cutting issues.
2.4 Policy Objectives
Within this policy framework, the construction industry policy Goal will be achieved through
specific objectives. The following are the specific objectives:
i. To develop robust, comprehensive, clear, and easily administered
registration, classification, and enforcement procedures and processes;

ii. To enhance the capacityof the local firms so that they provide quality works, and
competitive services in the construction industry at local, regional and international
markets;

iii. To promote regional and international collaboration and ensure that the local
industry take full advantage of special and differential treatment provided under
General Agreement on Tariffs and Trade (GATT) and other regional and
international trade protocols;

iv. To improve corporate governance in the construction industry;

v. To strengthen the institutional framework and improve coordination for The

National Construction Industry Policy implementation; and

vi. To mainstream cross cutting issues such as environmental management,

occupational safety and health, gender equality, HIV and AIDS, Disaster Risk
Management, in the industry

3 POLICY PRIORITY AREAS

This section outlines the areas the Policy has identified to guide the Industry. Under each Policy
Priority Area are policy statements that will guide the implementation of the Policy. There are
seven Policy Priority Areas.

3.1 Regulation of the Construction Industry

The National Construction Industry (NCI) Act of 1996 gives powers to NCIC to regulate the
construction industry. Part IV, Sections 11and 12 of the Act specify the regulatory functions and
powers of NCIC.
The Council has systems of classification for all persons engaged in the industry, registration
processes, and enforcement of provision in accordance with the Act. However, there are some
challenges being experienced in the processes including long processes and unclear criteria for
registration.

Policy Statements

The Policy will:

i. Develop and maintain classification system that facilitates growth, maximum

participation, and efficiency for the consultants, contractors and construction
material manufacturers and suppliers;

ii. Ensure that transparent, and well defined registration criteria and procedures for
enterprise registration and approval processes are developed;

iii. Ensure that only qualified and experienced individuals in the construction
industry register as persons engaged in the construction industry;

iv. Develop information system for data input, evaluation, verification and
inspection of applicants;

v. Promote small and medium scale contractors’ growth against large contractors
that bid for works meant for the small and medium scale contractors; and

vi. Ensure that tenders for projects of public interest will only be accepted from
service providers that are properly registered in accordance with the regulations.

3.2 Capacity Development for the Construction Industry

Capacity constraints are manifested through inadequate skills, inadequate capital base and
inadequate equipment. These inadequacies have led to low participation of local firms in the
industry, less trust in the local contractors and constrained growth of the firms themselves.
For instance, since the discontinuation of the engineering diploma courses offered by the
Polytechnic Board of Governors, there has been a growing gap between the graduate engineers
and the artisans.

The absence of village polytechnics also meant that aspiring labourers and skilled artisans at
community level are denied opportunities for development. The Malawi Government, realizing
this problem, is constructing community technical colleges in each district, these colleges will
provide an opportunity to out of school youth and those who are not able to proceed to tertiary
institutions, to acquire skills to enable them get employment or go into self-employment. The
introduction of community technical colleges is a major initiative of Government to increase the
skills of artisans in the country.

In addition, the certification mechanisms for Continuous Professional Development (CPD)are

uncoordinated due to the combined effect of CPD not being incorporated in both the Engineers
Act and the Architects and Quantity Surveyors Act.

Inadequate availability of equipment for construction works is one of the major problems facing
the local construction industry mostly by the small and medium scale contractors. The performance
of the State-owned the Plant and Vehicle Hire Organisation (PVHES) has not lived to the
expectations of the industry partly due to inadequate and aged plant and equipment.

There has also been low participation of the youth in the technical fields of construction. Most
youth with great potential have misdirected their energies resulting in involvement in self
destructive behaviour. In other instances training has not incorporated practical experience.

Policy Statements
The Policy will:
i. Segregate the roles of clients, contractors and consultants; ii. Facilitate sustainable level
of works and services, skills and technology transfer;
iii. Provide for the establishment of working capital and guarantees on easier terms
than traditional banks to contractors;

iv. Ensure that foreign firms fully adhereto joint venture and subcontracting
regulations, and labour laws;
v. Ensure that during negotiations for strategic development support the capacity
of the local construction industry is considered;

vi. Establish strategic partnerships, forums, and industry-wide database that gives
research and development information; vii. Increase capacity for teaching and
research in training institutions;

viii. Promote the introduction of relevant courses in rural polytechnics, community

colleges and teacher training institutions;

ix. Promote Research and Development (R&D) at universities and colleges,

Central Materials Laboratory, and other related research institutions;

x. Enhance collaboration with existing education and vocational training

institutions, such as The Polytechnic, TEVETA and other tertiary colleges, in
curricula review, development and implementation;

xi. Institutionalise monitoring and motivational tools that ensure that industry
players engage trainees for their development;

xii. Establish and maintain a system for professional development through

compulsory Continuous Professional Development (CPD), industrial attachments
and apprenticeships;

xiii. Enhance the operations of the professional bodies and review the legal
instruments / statutes;

xiv. Establish and promote equipment acquisition, access and ownership

scheme for local firms; and

xv. Review the establishment of the PVHES into a semi-commercial entity.

xvi. Ensure youth participation in research and development

xvii. Facilitate career guidance and internship for the youth
3.3 Enhancing Standards and Quality

Quality Assurance and maintenance of nationally approved standards are some of the key
mandates of the NCI Act. Section 11 (r) of the Act has specifically empowered the Council to
“standardize quality control, contract documentation, codes of practice, procurement processes,
and legal contractual procedures in liaison with other organizations”.

However, formulation of standards for the construction industry has not been aggressive This is
mainly due to lack of sufficient human and financial resources on the part of the Malawi Bureau
of Standards (MBS) and lack of direct commitment by the industry in standardization work.

Policy Statements
The Policy will:
i. Develop and enforce standards in the construction industry for construction
enterprises;

ii. Ensure development of standards of uniformity for procurement, design and

implementation of projects;

iii. Ensure that procurement procedures give favourable recognition of compliance

with set standards in the construction industry;

iv. Empower and equip the Central Materials Laboratory (CML) and establish a
mechanism for regular calibration of testing equipment;

v. Establish and equip specialised construction materials testing and research

centres including the CML;

vi. Provide framework for firms to acquire appropriate International Standards

Organisation (ISO) Certification; vii. Enhance monitoring and compliance
mechanisms in terms of cost, quality and time;
viii. Ensure public agencies and departments do not register or operate as contractors
and or consultants in the construction industry other than coordinating outsourced
services in line with promotion of private sector development;

ix. Monitor the conduct of project procurement and implementing agencies and
players in the construction industry
 x.

xi. Promote the mergers and Joint ventures in projects; xii. Establish a mechanism for
assessing and consolidating of construction industry needs and interventions;
xiii. Promote and integrate the informal construction sector in the mainstream
development and regulation activities;

xiv. Determine and promote "Best Practice Standards" practices exemplified

by leading Malawian and international firms;

xv. Facilitate forums for shared learning and access to information; xvi. Promote
strategic application of information technology, and technological development
over spectra of professions; and
xvii. Develop and maintain an enabling environment that enhances the competitiveness of
the local industry in international markets.

3.4 Regional and International Cooperation

This priority area is aimed at guiding the improved participation of local firms in regional and
international markets. It is widely acknowledged that the local Construction industry players
participate less in international markets because there is little understanding of the General
Agreement on Trade in Services (GATTS), the World Trade Organization (WTO), the Southern
African Development Community (SADC) and Common Market for Eastern and Southern Africa
(COMESA) and other trade protocols.

These protocols provide for preferential treatment in order to enhance regional development and
the capacity and local enterprises in the construction industry. However, Malawi has not taken
advantage of this.

Stakeholders have also expressed concerns over the limited involvement of technical experts when
these agreements are being negotiated.

Opening up of markets and globalization has also increased competition which poses a challenge
to local construction players.

Policy Statements
The Policy will:

i. Create awareness of trade and investment protocols under the WTO, and
regional groupingsparticularly COMESA and SADC;

ii. Ensure that technical experts are involved in the negotiations of regional and
international agreements;

iii. Enhance collaboration among MoIT, MCCCI, MITC, and NCIC and other
relevant institutions on international trade facilitation; and

iv. Enhance collaborative mechanisms thatfacilitate movement of construction

resources, firms and personnelat regional level.

3.5 Corporate Governance

This section is aimed at improving Corporate Governance in the Industry. The provision for
Corporate Governance in the Construction Industry is not clearly stipulated in the National
Construction Industry Act. The ODPP has developed procurement guidelines for both the public
and private sector based on the Procurement Act. However, there are limited mechanisms for
ensuring private sector adherence to these in the construction industry.

Corrupt practices have also been rampant in the construction industry.

Policy Statements

The Policy will:

i. Promote adherence to principles of good corporate governance; ii. Promote establishment

of sector implementation agencies to manage government construction projects;
iii. Ensure that construction players and stakeholders adhere to relevant regulations
in procurement, design and contract administration; and

iv. Ensure the adoption and promotion of principles of transparency and

accountability in the inception, design, procurement and implementation of
projects.

3.6 Strengthening of the Institutional Framework

This section is aimed at dealing with improving coordination mechanisms for the development of
the Construction Industry.

Policy Statements

The Policy will:

i. Ensure coordination among and regulation of relevant agenciesfrom inception

to project completion;

ii. Influence macro-economic policies and public sector investment in

construction;

iii. Review and amend the laws establishing the Professional Boards; iv. Co-
ordinate and promote the understanding and implementation of the
Construction Industry Policy; and

v. Monitor and provide advice on the effectiveness of government policies and

programmes for the enhancement of industry development and performance.

vi. Enhance mechanisms for management and maintenance of infrastructure

3.7 Crosscutting Issues

This Priority Area addresses the many cross-cutting issues affecting the Construction Industry.
This is in acknowledgement to different challenges that are external to the sector but greatly affect
it or are affected by it. These include the natural environment, natural and man-made disasters,
occupational, safety and health, gender, culture and heritage and HIV&Aids.

a) Environmental Sustainability

The Construction Industry greatly contributes to deforestation, noise, dust and chemical pollution,
soil erosion and physical disruption. In addition there have been a number of abandoned quarry
sites which have been left without being rehabilitated and bitumen wastes dumped carelessly in
roads projects. Some of these result in pollution of rivers and annihilation of aquatic life. While
the Environmental Impact Assessment is mandatory for certain projects, however, there are no
mechanisms for effective reinforcement.
Policy Statement
The Policy will:
i. Ensure that the Construction Industry protects and harnesses the environment in
line with national and international policies; and

b) Disaster Risk Management

Related to the environment, are the disaster risks presented through earthquakes like, landslides
and floods. The choice of designs and methods of construction need to take into account various
disaster mitigating factors and impacts of such risks in case of occurrence. This is to ensure that
infrastructure development taking place in disaster prone areas need to recognise and address them.

Policy Statements
The Policy will:
i. Sensitise stakeholders on disaster risks and mitigation measures in design and
construction of various infrastructure;

ii. Build capacity of industry players in developing appropriate designs and

construction methodologies that take into account various disaster risks; and

iii. Enforce compliance to relevant standards and regulations that mitigate disaster
risks.

c) Occupational Safety, Health and Welfare

Occupational Safety and Health (OSH) is important cross-cutting issue for moral, legal, and
financial reasons. All construction organisations have a duty of care to ensure a safe and healthy
work place environment in order to guard against ill health, injury, and death.

In Malawi, however, most contractors do not provide any protection materials for the workers.
This is further aggravated by the lack of adequate controls regarding workers’ health in the
construction sector.

Policy Statements
The Policy will:
 i. Reduce and eliminate the occupational safety risks and hazards in the
Construction Industry; and ii. Ensure compliance by industry players to developed
comprehensive occupational hazard mitigation schemes prior to being upgraded by the
NCIC;

d) Gender

Gender is another crucial issue in the Construction Industry. There is a general misconception
among girls and women that technical jobs are for men resulting into the gender imbalance in the
industry. Sadly, gender main-streaming education and training policies have not yielded the
desired retention of girls in primary and secondary schools, and the vocational and tertiary
colleges. Hence, there is little participation of women in the formal construction industry.

Policy Statement
The Policy will:
i. Ensure equal access to opportunities in the construction industry regardless of
gender by implementing affirmative action measures;

e) HIV and AIDS

HIV and Aids, has not been adequately addressed in the Construction Industry. Before an industry-
wide policy was launched in December 2013 construction stakeholders did not have guidance on
mainstreaming HIV in projects. As such, clients had neglected HIV and AIDS issues when
developing and funding construction projects. In turn, construction players have not been taking
the HIV and AIDS issues into account when managing and executing contracts.

Policy Statement
The Policy will:
i. Mainstream HIV and AIDS in the Construction Industry
OVERVIEW OF SOME MALAWIAN COMPANIES

PBM Construction Company Limited

PBM is an African owned construction business firm registered and incorporated under the
Companies Act, 1984 as Limited Company. PBM is professionally registered with the
National Construction Industry Council in unlimited Building category, Unlimited Civil
Categories and Specialist Borehole Drilling Category.

SERVICES

1. Water Engineering and Drilling of boreholes

Drilling of boreholes ranges from 1m deep to 150m deep boreholes of diameters ranging from 4.4”
to 8”. The scope involves conducting geophysical surveys, drilling, pump testing, water quality
testing, borehole mechanisation with solar or grid electricity and water reticulation even to large
communities. Our consultancy work in water will include aquifer mapping, water quality etc.

2. Design and Build

As a company that provides the Design and Build Service, it helps the client save time and
resources on hiring separate architects, engineers and consultants. PBM Design and Build service
to clients and expand their vision and dreams on various architectural spectrums.

3. Construction

PBM construction scope ranges from high rise buildings, flat buildings, roads, bridges, irrigation
schemes, corporate offices, factories and warehouses and many more

SAWA Group

The SAWA group of companies offers turnkey civil engineering, construction, support services
and facilities management services in sub-Saharan Africa. It was founded in 2008.
SAWA partners with public and private corporations, non-governmental organisations (NGOs)
and multilateral agencies to transform people’s lives by increasing available capacity in energy,
utilities, transport and housing.

SAWA Group’s Divisions

1. Engineering & Construction

SAWA Group’s Civil Engineering & Construction division provides general contracting,
electromechanical engineering and turnkey design-build (DB) solutions for infrastructure and
superstructure projects.

2. Support Services

The Support Services division supplies general and sector-specific technical, logistical and
operational support, and a range of maintenance engineering and facilities management (FM)
services.

3. Plant & Machinery

SAWA Group’s Plant & Machinery division manages the group’s extensive inventory of
construction machinery and plant hire activities, and is responsible for training operatives.

4. Trading

The group’s Trading division specialises in the importation and distribution within sub-Saharan
Africa of construction plant, building materials, industrial inks, Pharmaceuticals and the supply
& distribution of Grundfos pumps and products.

Taai Construction and Machinery Services Limited

Taai Construction and Machinery Services Limited was founded in 1996 and it is a family
owned company. Taai construction aim to provide Malawian residents with unparalleled roads
with a combination of exceptional services to their clients. By 2026, they aim to be the No. 1
contractor for road construction regardless of size, complexity or resources.
 REGISTRATION PROCEDURES, CRITERIA AND SCHEDULES FOR
CONTRACTORS, CONSULTANTS, CONSTRUCTION MATERIAL
MANUFACTURERS AND SUPPLIERS

Important Definitions The NCI Act defines persons engaged in the construction industry as
Contractors, Consultants, Construction Material Suppliers and Manufacturers.

1.2.1 Contractor

Any person who for reward or other valuable consideration undertakes the construction,
installation or erection for any other person, of any structure situated below, on, or above ground
or other work connected therewith or the execution, for any other person, of any alteration or
otherwise to any structure or other work connected therewith.

1.2.2 Consultant

Any experienced professional or group of professionals who for reward or other valuable
consideration provides expert knowledge and undertakes any phase of the construction project
cycle i.e. feasibility studies, project appraisal, preliminary and detailed design, supervision,
management, technical audit and evaluation of construction projects.

1.2.3 Construction Material Manufacturer

A person, or enterprise or an entity that manufactures or processes materials or components used

in the construction industry

1.2.4 Construction Material Supplier

A person, or enterprise or an entity that supplies materials or components used in the construction
industry

1.2.5 Malawian Firm

Malawian firms are those owned by indigenous Malawians and having more than 51 percent of
their capital originating from Malawi.
1.2.6 Local firm

Local firms are those owned by non-Malawians but with more than 51 percent of their Capital
Originating from within Malawi. No person who is not a citizen of Malawi shall be allowed to
form a local contracting firm unless the majority (more than 51%) of its shares are owned by
citizens of Malawi

1.2.7 Foreign Firm

Foreign Firms are those owned by non-Malawians and having over 51 percent of their capital
originating from outside Malawi.

2. Types of Registration

2.1 Temporary Registration

This is registration of foreign firms who have been awarded a specific project. The firm on
temporary registration is only allowed to undertake the works under which they were registered.
Prior to commencement of the work the firms must partner with eligible Local/Malawian firms in
a JV or Subcontracting arrangement as per requirements in the JV/Sub-Contracting Regulations.

If they wish to get involved in other works then they should apply for permanent registration after
meeting the requirements for permanent registration.

2.2 Permanent Registration

This registration applies to all types of firms (i.e. Malawian, Local and Foreign firms) seeking to
do business in Malawi and having resident offices in Malawi not being just for a particular project.

A firm registered under permanent registration will be subjected to review from time to time (at
the discretion of the Board) to ascertain if it still meets the minimum requirements for its class.

2.3 Joint Venture Registration

Construction firms can be registered as JVs when the firms have jointly tendered for the works
and been awarded a contract. Joint Ventures are usually formed for the purpose of either capacity
building in the case of a large contractor partnering with a small contractor or to tap expertise and
technological advantage of a joint venture partner in executing a complex project.

Firms applying for registration as a joint venture must all be individually registered by the Board
as bona fide contractors in the required type of registration prior to seeking JV registration.
Classification of a joint venture is dependent on the combined resources that each individual JV
partner commits into the JV.

Like temporary registration, JV’s between Foreign and Local/Malawian are entitled to undertake
works only for the duration or period of the contracted works.

3 PART II Procedure for Registration

3.1 Applications and registration criteria

Any person applying for registration or upgrading to a particular category and field will be
evaluated on the basis of the criteria set out in schedules in this document which are subject to
revision by the Board from time to time.

3.1.1 Basic Requirements

The basic requirements for any person or group of persons applying for registration as a contractor,
consultant, Project Manager or Construction Material Supplier or Manufacturer are as follows:

i. Such a person has a Certificate of Registration from the Registrar of Companies either
as a Limited Company, partnership or sole proprietorship and a Tax Registration
Certificate from Malawi Revenue Authority (MRA).
ii. In the case of Limited Liability Company the Certificate must be accompanied with
certified copy of Memorandum and Articles of Association. Partnership and sole
proprietorship firms must submit certified copy of the Certificate from the Registrar of
Companies.
iii. At least one of the shareholders or partners must have the minimum technical
qualifications stipulated in Criteria for Registration.
iv. Such a person has the necessary knowledge, skill(managerial/professional) and or
experience in works involving construction, erection, installation, alteration or any
activity which is connected with these
 v. Demonstrate proof of ownership / lease of office facilities, equipment, plant,
tools/instruments, workshops and yards, capital and other financial resources
vi. The NCIC will review the curriculum vitae of each shareholder or partner as the case
may be to ensure that they are persons of good profession and general conduct.
Where deemed necessary, the Council may require the attendance of such a person
before it to present documentary evidence in support of the registration. Where any
person whose present is required is not present, or any document demanded is not
produced, the registration process may be postponed to give reasonable opportunity for
the appearance of such person or the production of such document.

3.2 Temporary Registration

This is registration of foreign firms who have been awarded a specific project. Any foreign firm
intending to carry out a specific contract for which it has contracted shall submit to the NCIC the
application upon payment of application fees as set out in the Schedule. A duly filled application
form shall further be accompanied with the following information:

i. The principal of the firm is not a citizen of Malawi

ii. The company profile. The profile must include registration particulars with similar
institution in country of origin
iii. The Company is in partnership with local/Malawian construction firms through JV and
or Sub-Contracting arrangements. Documentary evidence must be part of the
application
iv. Evidence of the contracted project such as an offer letter or signed agreement
v. Particulars of the key personnel engaged in the project including their profession,
nationalities and work permits. The firm has in its employment, only those expatriates
whose qualifications and skills are not available in Malawi
vi. Particulars of equipment and plant to be deployed for the project
vii. Experience of the firm including particulars of the projects executed over the last ten
years. Particulars must also include full contact details of clients.
viii. Certificate of compliance from the registrar of companies in Malawi.
ix. A letter from the client supporting the application which shall include contract award
letter or intention to award.
 x. An affidavit declaring that once the firm has completed the specified contract, it shall
wind up business and it shall not engage in any other before applying for permanent
registration
xi. A signed declaration that the firm shall not involve itself in corrupt practices and that
it shall comply with all conditions of registration and the applicable codes of ethics and
regulations.
xii. The firm may be required to appear before the Council to produce documentary
evidence of its competence in executing construction works immediately prior to its
entry in Malawi which the Council will verify with relevant authorities in originating
countries and
xiii. In case of Foreign Consultancy firm’s registration, firms shall apply through member
practice for registration on their behalf in accordance with Practice of Construction
Consultancy Services by Foreign Consulting Firms, Regulation 2004.

3.3 Permanent Registration

3.3.1 Local/Malawian Firms

Applications for permanent registration or upgrading will be submitted on an appropriate form

issued by the NCIC on Payment of Application Fee prescribed in the Schedule. The duly filled
application form should further give the following information.

i. Business registration certificate, MRA Tax registration certificate, principal place of

business and contact details such as postal and physical addresses, email address and
phone numbers
ii. Applicants financial status, including liquidity, annual turnover and value of fixed
assets supported by bank statement, audited accounts and assets valuation report
iii. Relevant qualification particulars of the applicant and key personnel employed by the
firm.
iv. Particulars of equipment and transport owned by the applicants.
v. Firm's experience in the field of application indicating particulars of major projects
executed in the last three to ten years depending on the category applied for.
 vi. Names and qualifications of at least two referees (persons representing firms) who must
be registered Engineers, Architects or Quantity Surveyors that have previously
supervised applicants projects.
vii. A signed declaration undertaking to comply with the conditions of registration and
applicable code of ethics and non-involvement in corrupt practices Apart from the
information each director / shareholder or partner will be required to fill a prescribed
Curriculum vitae form to provide personal bio data, academic and professional training,
and professional experience. Other attachments are listed at the end of the application
form.

3.3.2 Foreign Firms

This is permanent registration for Foreign Firms that are coming to Malawi not for a specific
project and do not meet the 51% Malawian shareholding or have completed their specific
project after first registration and want to get established in Malawi.

Applications will be submitted on an appropriate form issued by the NCIC on Payment of

Application Fee prescribed in the Schedule. The following minimum conditions shall have to be
met.

i. The principal of the firm is not a citizen of Malawi

ii. The firm is incorporated outside Malawi
iii. The firm has in its employment, only those expatriates whose qualifications and skills
are not available in Malawi.
iv. the firm has a certificate of compliance from the registrar of companies showing that
the firm is or prior to entering Malawi was trading as a contractor or consultant in a
capacity that satisfies the Council’s prescribes categories or classes
v. the firm is committed to fulfil all relevant regulations in the industry,
vi. the firm may be required to appear before the Council to produce documentary
evidence of its competence in executing construction works immediately prior to its
 registration in Malawi which the Council will verify with relevant authorities in
originating countries

No person who is not a citizen of Malawi shall be allowed to form a local contracting firm unless
the majority (more than 51%) of its shares are owned by citizens of Malawi

3.4 Joint Ventures – Local/Malawian Firms

Joint Venture (JV) means an agreement between two or more construction firms for purposes of
securing and executing a contract and in meeting the provisions of the agreement.

Local/Malawian firms can apply for registration as Joint Ventures as a capacity building strategy.
Firms intending to apply for JV registration should be bona fide registered Contractors and a duly
filed application form and shall be further accompanied by the following:

i. A Memorandum of Understanding for the Joint Venture

ii. Power of Attorney of authorized representative of the Joint Venture
iii. Evidence of Registration status with NCIC of their individual firm
iv. Particulars of Plant and Equipment that the firms shall commit into the JV
v. Particulars of key personnel engaged in JV their professional certificates and CV’s

There are two types of Joint Venture combinations as described hereunder.

3.4.1 Joint Venture Combination I

In this combination, each partner of the joint venture must be separately registered and active and
the lead partner must have a category not lower than one level below the required category in the
class of construction works under consideration.
3.4.2 Joint Venture Combination II

Just as in combination one, each partner of the joint venture must be separately registered and
active. This is the combination where partners in different categories make a JV arrangement to
participate in a tender whose class of works is higher than the limit of each member. The
assessment of such arrangements will be based on the already fulfilled requirements of individual
member in his/her present category of registration and will be deemed to satisfy the requirements
for a joint venture for the higher category in the following combinations.

Table 1: Building, Civil and Electrical Contractors

Joint Venture combinations to achieve a higher category (deemed to Class achieved by

satisfy joint venture arrangements) the Joint Venture

Two K10.0M contractors K20.0M

Three K20.0M contractors K50.0M

Two K50.0M contractors or three K20.0M and one K50.0M contractors K100.0M
or five K20.0M contractors

Two K100.0M contractors or two K50.0M and K100.0M contractors K200.0M

Two K200.0M contractors or two K100.0M and one K200.0M K500.0M

Two K500.0M contractors K1.0Billion

Two K1.0Billion contractors Unlimited

In both combination types all partners are dully approved and registered in their respective
individual categories and the JV arrangements shall be exempted from submission to Board for
approval in order to enhance optimizing on opportunities as they arise in the industry. All JVs will
be registered by the Council and the Board will be notified of the same during its meetings.
Categories for Civil, Building and Electrical Contractors

Table 2: Details of Class and Categories

Class Building Category Civil Category Electrical/Specialists
(Malawi Kwacha) (Malawi Kwacha) Category (Malawi
Kwacha)
2 10.0 Million 10.0 Million 10.0 Million
3 20.0 Million 20.0 Million 20.0 Million
4 50.0 Million 50.0 Million 50.0 Million
5 100.0 Million 100.0 Million 100.0 Million
6 200.0 Million 200.0 Million 200.0 Million
7 500.0 Million 500.0 Million 500.0 Million
8 1.0 Billion 1.0 Billion 1.0 Billion
9 Unlimited Unlimited Unlimited
Details of Criteria for Registration are contained in Annex 1

Table 3: Illustration of nature of works

No. Type
1 Building Contractors
2 Civil Contractors
3 Electrical Contractors
Nature of Works
Construction/Rehabilitation/Maintenance of residential,
commercial and industrial buildings – single and multi storeyed
together with associated external works
Construction/Rehabilitation/Maintenance of roads, bridges and
highways and associated works, construction of dams,
irrigation systems and associated waterworks
Domestic, commercial and Industrial electrical installation,
Renewable Solar Energy works, Air conditioning and
Refrigeration, Genset installation, construction of high and low
tension power lines, power generation and distribution, motor
rewinding,
Classification of Consultants

Consultants in the construction Industry are currently grouped into seven categories depending on
the area of their professional training and specialization namely; Engineering Consultants,
Architectural Consultants, Land Surveying Consultants, Quantity Surveying Consultants,
Environmental Consultants, Project Management and Specialist Areas Consultants. The general
requirement for all consultants is a minimum of first degree from a recognized institution and
registration as a registered professional with the relevant professional body. The applicants should
further be current in their membership subscription and operate according to the professional code
of conduct and rules governing their profession.

Table 5: Minimum requirements for registration of consultants

Field of Practice Minimum Qualifications Professional Membership

BSc Degree in Board of Architects and Quantity

Surveyors
Architecture Architecture and min of five
years experience

Engineering BSc in relevant Field of Malawi Board of Engineers

Engineering and min of five
(Civil, Structural,
years experience
Water, Mining,

Mechanical,

Electrical, etc)
Project BSc in relevant technical field Membership of relevant
plus degree in project professional body,
Management
management, construction
management, etc,

including requirements in

Section 3.9

Environmental First Degree in Certification by the

Consultants
Environmental Studies and Department of
min of five years experience
Environmental Affairs

Land Surveying BSc Degree in Land Certification by the Surveyor

Surveying and min of five General
years experience

Quantity Surveying BSc in Quantity Surveying Board of Architects and

and min of
Quantity Surveyors
five years experience

First Degree in relevant field Relevant professional body as

and min of five years may be determined by the NCIC
Specialist Areas
experience board.
3.8 Classification of Construction Material Suppliers and manufacturers

Suppliers and manufacturers of construction materials are put into three broad groups as follows:

i. Construction Material Suppliers, these supply the materials

ii. Construction Materials Manufacturers and Suppliers, these are those who Manufacture
and Supply

iii. Construction Material Suppliers and Installers, these fall in specialist category and they
supply and install specialist equipment and fittings

These are categorized depending on specific products that they deal in as follows for
Manufacturers:

i. Manufactures of cement, lime and related binding products

ii. Pipe extruders and related fittings and products

iii. Manufacturers of Ceramic Products, Bricks, Concrete Blocks and its derivatives

iv. Paint Manufacturers and its derivatives

v. Manufactures and Fabricators of steel products including cladding

vi. Manufacturers of electric Cables and associated fittings and products

vii. Manufacturers of Sanitary Fittings

viii. Manufacturers of Wood Products and Its Derivatives

ix. Quarries

x. Manufactures of Renewable energy equipment and accessories

xi. Manufacturers of Glass and Glazing

xii. Manufacturers of Dimension Stones and its derivatives

 xiii. Bitumen Producers and its derivatives

Suppliers are also classified according to the class of products they are dealing with. The main
categories are in line with the manufacturers

i. Cement Lime and Related Products

ii. Plumbing materials and Fittings

iii. Paint and its derivatives including vanishes

iv. Structural Steel and Cladding

v. Sanitary ware and fittings

vi. Ceramic Products, Bricks, Concrete Blocks

vii. Electrical Cables and Fittings

viii. Wood, Wood Products and its Derivatives

ix. Aggregates

x. Bitumen and its derivatives

xi. Glass and Glazing

xii. Renewable Energy Supplies

xiii. Air Conditioning and Heating Systems

xiv. Miscellaneous Suppliers

Apart from the general requirements for registration these require to submit verifiable certificates
of compliance to standards.
3.9 Project Management Consultant Registration Requirements

Applications for Project Management Consultants will be submitted on an appropriate form issued
by the NCIC on Payment of Application Fee prescribed in the Schedule. The duly filled application
form should give the following information.

i. Certified copies of Identification Document(s).

ii. Certified copies of relevant qualification certificates and professional registrations
iii. Detailed Curriculum Vitae

iv. List of project undertaken in the last Four (4) years with all the required details

v. Reports for Two (2) projects which the applicant has had responsibility for demonstrating
the applicant’s technical competence. The reports must show the applicant’s understanding
in the following key areas of Project Management: Project Integration, ii) Project Scope
Management, iii) Project Time Management, iv) Project Cost Management, v) Project
Quality Management, vi) Project Human Resource Management, vii) Project
Communication Management, viii) Project Risk Management including Health and
Safety issues, ix) Project Procurement Management

3.10 Processing of Applications

The applicant shall return a duly filled, signed and stamped application to the Council for
assessment and approval by the Board. All applications below go through six broad stages as
follows:

i. Preliminary review

An application shall be considered complete and ready for evaluation, only if the application forms
have been properly filled and all necessary attachments have been submitted. The Council shall
inform the applicant to submit any data which is missing or inadequately submitted
 ii. Validity of Application

An application with shortfalls identified during evaluation within the three months period shall be
considered stale and shall not be processed. Should applicants still wish to be registered or
upgraded, they will have to file in fresh applications

iii. Data Verification

i. At least one officer of the Council shall visit and inspect the offices,
workshops, yard, properties and projects executed (for upgrading applicants)
or other facilities of the applicant. Verification of key technical personnel
employed by the firm shall be done upon provision of authenticated signed
agreements and pay rolls.

ii. Applicant shall provide local transport for physical visits to his /her project
sites and other facilities necessary for inspection and verification that are
outside the city/district boundaries.

iii. The persons carrying out the inspection are required to fill the inspection form
IVF001.

iv. Construction Levy Compliance and registration of projects through Project

Registration Regulation 2014 shall also be verified on all projects indicated as
previous firm’s experience. Application with projects that cannot be verified
shall not be considered.

iv. Referees, Clients and Consultant Recommendations

The next step is to obtain independent comments and recommendations from the referees, clients
and consultants proposed by the applicant.

v. Data Evaluation

After inspection the data will be compiled and evaluated so as to establish the appropriate Class
of Registration in accordance to established Registration criteria.

vi. Board’s Decision on Application

The Board shall consider the application, and make a decision as appropriate. Thereafter the
applicant shall be informed of the Board’s decision.

The process takes a minimum of 90 days from the date of previous Board meeting while as for
those in the five-million-kwacha category takes a maximum of 14 days from date of submission
dependent on availability of the Chief Executive Officer for approval. The procedure is further
outlined in the Registration Flow Chart, Annex IV

4 Determination of Class of Registration

4.1 Class determination

In determination of appropriate class for registration as a contractor, any contractor applying for
registration or upgrading to a particular class will be evaluated on the basis of the following
criteria. Maximum points are allocated to each requirement as in Table 5.
Table 6: Determination of Class of Registration

An applicant who scores an aggregate of 60 points and above, but not less than 50% of the points
allotted in any criteria (1) through (6) shall qualify for registration and upgrading in the relevant
class.

Local contractors applying for first registration or Upgrading in Classes 1 and 2 will not be
assessed for experience of the firm. In such cases experience of the shareholders or partners
forming the firm and their employees will be taken into account. The following are the details for
each criterion.
 OPPORTUNITY GAP IN THE CONSTRUCTION INDURSTY

In every crisis there an opportunity, and every problem is gap for new investors. With proper
analysis of the Malawians construction industry, it has been observed that Small Medium Micro
Enterprise Contractors (SMME) are the ones facing a lot of challenges, with the reason we will
discuss shortly. If an investor has the capacity to solve problem discussed here or has the potential
to secure a Joint venture, this could be combination I or combination II, there is a higher chance
of success.

1. Statement of the problem Malawian

1.1 SMMEs face a host of constraints and challenges.

Hardly a week passes without an article in the daily newspapers highlighting the shortfalls of
SMME contractors work. This is largely blamed on the many limitations SMME contractors are
facing. Many citizens have condemned some of the work carried out by SMME Contractors and
yet the government is advocating that construction professionals should form SMMEs with an aim
of reducing unemployment and accelerate infrastructure development.

1.2 Statement of sub-problems

1.2.1 Sub-problem one SMME contractors lack training.

Training is a very important aspect of any business in order for a firm to succeed. The lack of well
trained personnel can be detrimental to the success of the firm. CIDB (2008b) states that there is
an indisputable link between the quality of projects delivered by contractors and skills. The board
believes that formal education and skills development is the key to a better construction industry
in South Africa.

1.2.2 Sub-problem two SMME contractors lack access to finance.

According to Kayanula and Quartey 2000, capital is a major problem facing SMMEs in Malawi
and Ghana. Carson (2006) argued that the difficulties that SMME contractors have in attracting
finance; strongly affect the performance of their work. They lead to a variety of sub-optimal
situations where construction operators delay construction, work with the wrong type of equipment
and sometimes pull out because of sudden financial problems.

1.2.3 Sub-problem three SMME contractors lack business management skills.

Management expertise is claimed to be one of the scarcest resource in the construction industry.
The lack of managerial know-how places significant constraints on SMME contractors’
development and growth

1.2.4 Sub-problem four SMME contractors lack information technology skills.

Many commentators and researchers have taunted the arrival of Information Communication
Technology (ICT) as a way forward to expedite infrastructure development. However, various
researchers have concluded that the construction industry is lagging far behind other industries in
employing ICT as a major catalyst for improving productivity and job creation

1.2.5 Sub-problem five SMME contractors indulge in unethical business behaviour.

The contractors need to market themselves and the pressures involved in winning the tender lead
to the unethical practices. In this lies the value of studying the moral aspects of business behaviour.
Ray et al. (2000) further said that an understanding of the ethics of tendering can help codify, and
finally simplify, one aspect of the very complex support system of contract bidding in construction.

Constraints faced by SMME contractors in general

Ngoma (2006) cited the National Roads Authority Annual (NRA) Reports of 2006, which gives
a good analysis of the state of road construction in Malawi. The reports mention lessons and
challenges concerning work out-put by contractors. The lack of adequate capacity from the
construction industry is highlighted. The reports also expose weaknesses in road construction.
Targeted standards were not met. Ngoma concluded by saying that training programmes in
specialised areas are key to changing

the present status. Khanje (2009), further reported that the Road Fund Authority (RFA) terminated
12 of the 240 contracts entered into with construction firms in 2008 financial year due to various
problems, largely “non-performance” on the part of the contractors. According to Buys (2006),
one of the biggest problems in the construction industry is that of the endless disputes between the
client, the professional team and the building contractors regarding the valuation and payment of
the monthly interim certificates. Cheung, Tan, Ndekugri and Harris (2000) noted that resolving
disputes has been part of routine management function of project participants. Bonhen (1999)
stated that the most significant issues facing the construction manager before litigation or
arbitration is invoked are the pricing of variations, disputes regarding payment certificates and the
repudiation or cancellation of the contract.

An article by Singini (2008) reported on a meeting held by the RFA with civil engineering
consultants and contractors in Mzuzu, Malawi as part of its programme to engage with various
stakeholders to help solve problems that develop due to misunderstandings. The meeting offered
the opportunity for the stakeholders to raise problems they face. During the meeting, contractors
questioned some of the conditions the RFA put into place. Some contractors felt that the conditions
were hard on SMME contractors and gave room to big companies that are awarded larger contracts
to make big profits. One notable condition which SMME contractors questioned was the
requirement of a qualified site agent and foreman with specific qualifications when working on a
particular project. It was observed that most SMME contractors are unable to pay the salary of
these highly qualified officers.

In a related recent article Munthali (2008) reported on another meeting between the RFA and the
Public Affairs Committe (PAC) of parliament. The PAC reported that SMME contractors in the
road construction sector failed to fully utilise the allocation for their projects during the previous
financial year due to lack of adequate capacity. MPs wanted to know whether SMME contractors
could manage road maintenance programmes estimated at MK7 billion, while at the same time
taking up new road construction projects. The Executive Officer (EO) observed that capacity was
the problem. The EO cited the lack of qualified personnel, lack of equipment and financial
capacity. The EO suggested that joint ventures among SMME contractors might solve problems
faced by these contractors.
In Conclusion

The construction industry demonstrated tremendous growth in the past years. With the industry
not showing any indication of reduced demand, it has become extremely important to train SMME
contractors to ensure that they are competent.

The construction industry in Malawi requires sustainable SMME contractors who are able to
contribute to the socio-economic and socio-environmental needs of society. SMME contractors
should be able to provide sustainable and create employment in order to alleviate poverty. The
expectation is that they will follow become best practice once a contract has been awarded to the
contractor.

The research has revealed that SMME contractors face a variety of constraints. The specific
problems differ by country, but many are related. Access to finance remains a dominant constraint
to SMME contractors in Malawi. Other constraints faced by the sector include: lack of access to
appropriate technology; the existence of laws, regulations and rules that impede the development
of the sector; weak institutional capacity and lack of management skills and training.

The opportunity is here, with the ever increasing demand, the chances of one to succeed once
ventured into construction industry is great, with the challenges discussed here, these are also
opportunities, and the future in this industry belongs to those who are able and willing to solve the
constraints faced, otherwise many will be left behind.