RESEARCH ARTICLE

 

Critical success factors framework for enhancing the sustainability of small and medium-sized contractors in Namibia

 

 

Tinoapei Dhliwayo^I; Innocent Musonda^II; Trynos Gumbo^III; Godwin Kaisara^IV

^IDepartment of Architecture, Planning and Construction, Namibia University of Science and Technology, Private Bag 13388, Windhoek, Namibia. Email: <tdhliwayo@nust.na/nashetinopona@gmail.com> ORCID: https://orcid.org/0000-0001-5925-8397
^IIDepartment of Construction Management and Quantity Surveying, University of Johannesburg, P.O. Box 524, Doornfontein Campus, Johannesburg, South Africa. Email: <imusonda@uj.ac.za>, ORCID: https://orcid.org/0000-0003-0270-6158
^IIIDepartment of Urban and Regional Planning, University of Johannesburg, P.O. Box 524, Doornfontein Campus, Johannesburg, South Africa. Email: <tgumbo@uj.ac.za>, ORCID: https://orcid.org/0000-0003-3617-4996
^IVDepartment of Information and Knowledge Management, University of Johannesburg, P.O. Box 524, Auckland Park, Johannesburg, South Africa. Email: <gkaisara@gmail.com> ORCID: https://orcid.org/0000-0002-5684-6764

 

 

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ABSTRACT

The sustainability of small and medium-sized contractors (SMCs) is vital, considering the critical role they play in socio-economic development globally. SMCs in Namibia have been consistently grappling with high failure rates over the years, largely due to a dearth of robust policy frameworks to guide SMC development and sustainability in the country. This study investigates the critical success factors (CSFs) for SMCs' sustainability in Namibia. Using a qualitative approach, data were collected from 60 purposively selected construction industry participants, comprising owner-managers of contracting firms, policymakers, and construction professional consultants. Interviews were conducted with the participants, using a semi-structured interview tool. Data were then analysed using reflexive thematic analysis. The findings revealed six CSFs, including public and private institutions' collaborative support, skills training, an enabling construction business environment, access to adequate and affordable finance, consistent work opportunities, and firm owner's entrepreneurial skills. The identified CSFs culminated in the development of a framework for guiding the development of SMCs in Namibia. By incorporating the six CSFs in the framework, SMCs could be effectively developed and sustained. The framework may assist policymakers in making fundamental policy reforms and developing appropriate and context-specific interventions to sustain SMCs in Namibia and similar contexts.

Keywords: critical success factors, framework, skills development, small and medium-sized contractors, sustainability, Namibia

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ABSTRAK

Die volhoubaarheid van klein- en mediumgrootte kontrakteurs (SMC's) is noodsaaklik met inagneming van die kritieke rol wat hulle in sosio-ekonomiese ontwikkeling wêreldwyd speel. SMC's in Namibië worstel deur die jare deurlopend omdat hulle misluk, hoofsaaklik as gevolg van 'n gebrek aan robuuste beleidsraamwerke om SMC-ontwikkeling en volhoubaarheid in die land te rig. Hierdie studie ondersoek die kritieke suksesfaktore (GSF's) vir SMC's se volhoubaarheid in Namibië. Deur 'n kwalitatiewe benadering te gebruik, is data ingesamel van 60 doelbewus geselekteerde konstruksiebedryfdeelnemers, bestaande uit eienaar-bestuurders van kontrakterende firmas, beleidmakers en konstruksie professionele konsultante. Onderhoude is met die deelnemers gevoer deur gebruik te maak van 'n semi-gestruktureerde onderhoudsinstrument. Data is ontleed met behulp van refleksiewe tematiese analise. Die bevindinge het ses GSF's aan die lig gebring wat insluit die openbare en private instellings se samewerkende ondersteuning, vaardigheidsopleiding, 'n bemagtigende konstruksie-besigheidsomgewing, toegang tot voldoende en bekostigbare finansiering, konsekwente werksgeleenthede en firma eienaar se entrepreneuriese vaardighede. Die geïdentifiseerde CSF's is gebruik vir die ontwikkeling van 'n raamwerk vir die rigtinggewing van die ontwikkeling van SMC's in Namibië. Deur die ses CSF-faktore in die raamwerk in te sluit, kan SMC's effektief ontwikkel en volgehou word. Die raamwerk kan beleidmakers help om fundamentele beleidshervormings te maak en toepaslike en konteksspesifieke intervensies te ontwikkel om SMC's in Namibië en soortgelyke kontekste in stand te hou.

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1. INTRODUCTION

Small and medium enterprises (SMEs) are widely regarded as the engine of growth that could catalyse economic growth, employment creation, and poverty alleviation worldwide (Ng & Kee, 2017; Abosede et al., 2019). The SME sector in the construction industry is among the sectors witnessing large capital outlays that can appropriately contribute to realising the aforementioned benefits (Sarvari et al., 2021). The construction industry comprises a large number of small and medium-sized contractors (SMCs), which are key drivers of sustainable infrastructure development in the vast majority of developing countries (Offei, Kissi & Nani, 2019; Ofori-Kuragu, Baiden & Badu, 2016). SMCs contribute between 50% to 60% to the gross domestic product (GDP) in both developed and developing countries (OECD, 2019; Anugwo & Shakantu, 2020). Similarly, SMCs are among the largest contributors to Namibian GDP (Negussie, 2022), although their contribution of approximately 20% towards GDP is relatively less than in other sub-Saharan African countries (Mukata & Swanepoel, 2017). Inarguably, SMCs help catalyse socio-economic development, particularly in the developing world. As a result, there has been an increased interest among governments and policymakers in developing countries to further promote SMCs in the mainstream economy (Asante, Kissi & Badu, 2018; Lello & Mtendamema, 2018).

However, extant literature reveals that most of the SMCs in Southern Africa encounter a myriad of challenges that hinder their sustainability (Wentzel, Fapohunda & Haldenwang, 2022; Adebowale & Agumba, 2023). In fact, Wentzel et al. (2022) found that 70% to 80% of the SMCs in South Africa discontinue operations in less than five years after their inception. Poor management skills have been pointed out as one of the leading causes of SMC failure (Sarvari et al., 2021). Lack of management skills has a deleterious effect on the sustainability of SMCs. Among others, the lack of managerial skills may lead to the misappropriation of funds (Asante et al., 2018). Mafundu and Mafini (2019) found a prevalence of the authoritarian leadership style among SMCs in South Africa, leading to poor strategic planning, communication, and ultimately, poor performance and failure. Although there is scant evidence of specific studies on SMC failure in the Namibian context, the persistent business failure in the broader SME sector is well-documented (Kambwale, Chisoro & Karodia, 2015; Mukata & Swanepoel, 2017). The predicament of high failure rates for SMEs is common in many developing countries in the Global South (Lello & Mtendamema, 2018; Offei et al., 2019), despite the numerous interventions introduced by governments over the past three decades (Adediran & Windapo, 2017; Dapaah, Thwala & Musonda, 2017). Given the importance of SMCs and their persistently high failure rate, questions on the critical success factors (CSFs) that could enhance SMCs' sustainability persist. Many scholars (Ng & Kee, 2017; Sarvari et al., 2021; Dhliwayo, Musonda & Gumbo, 2022a; 2022b) agree that the identification of CSFs is cardinal for stimulating the continued survival of SMCs in each distinct country. This, in turn, may significantly contribute towards the attainment of UN Sustainable Development Goal 8, that is, creating decent work and economic growth. On the other hand, Sarvari et al. (2021) argue that the lack of knowledge of the relevant CSFs retards the potential of SMCs to operate effectively.

While it is evident that studies on CSFs of SMCs have been conducted in some countries such as Ghana (Ofori-Kuragu et al., 2016) and South Africa (Aigbavboa, Tshikhudo & Thwala, 2014), Hove (2017: 28) argues that "there is no consensus on which factors affect business success". Moreover, there are no known studies on Namibia regarding SMCs sustainability within the construction industry. On the other hand, while CSFs from different contexts may share common foundational characteristics, some factors are specific to particular contexts or domains (Borman & Janssen, 2013). Consequently, Borman and Janssen (2013: 101) argue that "some CSFs are likely to tend towards universality while others are likely to be context dependent". As such, the current study seeks to contribute towards addressing this vacuity in literature, by developing a CSF framework that could enhance the sustainability of Namibian SMCs.

 

2. LITERATURE REVIEW

2.1 The definition of success and critical success factors

The definition of success varies with context. Watson, Hogarth□Scott and Wilson (1998) posit that a business is successful if it continues to trade, and it is said to have failed if it ceases trading. For businesses to be successful, it is pertinent that they identify the critical factors that could lead to sustained operations. According to Leidecker and Bruno (1984: 24), CSFs are defined as the "characteristics, conditions, or variables that, when properly sustained, maintained, or managed, can have a significant impact on the success of a firm competing in a particular industry". When stakeholders identify the relevant CSFs in a particular industry, they are better positioned to be intentional and boost the CSFs for better outcomes (Alqahtani & Rajkhan, 2020). Alrasheedi, Capretz and Raza (2015) argue that CSFs are rarely universal but change as per context. Consequently, while the current body of literature helps advance the understanding of CSFs in general, the contextual gap in the developing world necessitates more context-specific research.

2.2 Critical success factors (CSFs) for SMC sustainability

Several studies have explored the CSFs of contractors in both developed and developing countries. In an earlier study conducted in China, Lu, Shen and Yam (2008) identified 35 factors that are critical to the competitiveness of contractors. These were then clustered into eight variables, namely project management skills, organisation structure, resources, competitive strategy, relationships, bidding, marketing, and technology. In Ghana, Ofori-Kuragu et al. (2016) found that CSFs that stimulate contractor growth include quality and zero defects culture, organisation design, work culture and work environment, client satisfaction, strategy, leadership, measurement, analysis of information and knowledge management, as well as implementation of lean principles. On the other hand, in a South African study that sought to identify the CSFs that could enhance the sustainability of SMCs in the greater Johannesburg metropolitan area, Aigbavboa et al. (2014) observed that SMCs are stimulated by four CSFs, including good management skills, maintaining good relationships with clients, proper record keeping, and good cash-flow management.

While similarities exist among some of the factors observed in different countries, it is noteworthy to highlight that differences also occur in the factors regarded as critical in different contexts. However, despite the differences observed among different contexts, the commonly noted CSFs include financial resources, pertinent skills such as technical, managerial, technological, and owner/manager's entrepreneurial skills, as well as consistent work opportunities, conducive business environment, and the collaborative role of public and private institutions.

2.2.1 Financial resources

Several studies reveal that SMCs' access to adequate and affordable capital financing stimulates their sustainability (Anugwo & Shakantu, 2020; Hove, 2017; Rwelamila & Ogunlana, 2015). Finance is essential for various operational reasons. For example, SMCs require start-up capital for resource mobilisation, performance guarantees, and insurance policies to successfully execute their projects (Lello & Mtendamema, 2018; Offei et al., 2019). However, various scholars in different contexts such as South Africa (Aiyetan & David, 2023), Ghana (Offei et al., 2019), and Tanzania (Lello & Mtendamema, 2018) have highlighted the difficulties that SMCs face in accessing finance. As a result, scholars such as Anugwo and Shakantu (2020) argue that insufficient capital is the main reason SMCs fail. In Namibia, financial constraints not only hamper the operations of SMCs, but also have a deleterious effect on larger contractors, often leading to cost overruns (Kambwale et al., 2015; Negussie, 2022). To meet their financial needs, SMCs largely depend on personal savings to finance their projects (Taiwo, Falohun & Agwu, 2016; Anamege, 2019).

2.2.2 Requisite skills

The construction industry is highly technical and requires SMCs to possess the requisite skills if they are to remain sustainable (Amoah & Bikitsha, 2021; Anugwo & Shakantu, 2020; Nofal & Yusof, 2015; Ofori, Zhang & Ling, 2020). SMCs with inadequate construction knowledge and experience often fail in delivering projects (Martin & Root, 2012; Thwala & Mofokeng, 2012). In a study conducted in New Zealand, Hall et al. (2023) found the lack of technical skills in BIM to be the most significant barriers to SMC sustainability. In South Africa, studies have revealed that the lack of technical skills was particularly acute among Black-owned SMCs, due to the continuous loss of trained professionals (Mafundu & Mafini, 2019), leading to increased failure rates. In a Namibian study focused on broader SMEs rather than SMCs, Kambwale et al. (2015) found that the lack of management skills is the leading cause of SME failure in Namibia. While various types of skills are important, studies have found that attitudes towards skills acquisition are not always positive. For example, Malesev and Cherry (2021) found that older SMC owners sometimes considered the acquisition of certain skills a waste of time. This emanated from their perceived old age and self-diagnosed inability to learn new skills. Therefore, an amenable attitude towards skills acquisition cannot be assumed to be universally held.

2.2.3 Consistent work opportunities

The provision of work opportunities to SMCs is also rated as one of the key determinants of SMC sustainability (Adediran & Windapo, 2017; Anugwo &Shakantu, 2020; Bikitsha & Amoah, 2022). It is reported that the failure to secure continuous work opportunities leads to SMCs operating at low capacity (Thwala, Mustapha & Aigbavboa, 2018), thereby resulting in stagnant or marginal growth. As such, in a study in South Africa focusing on the influence of contractor development programmes (CDPs), Dapaah et al. (2017) argue that the government and other key stakeholders should deliberately create work opportunities for SMCs. It has been established in countries such as Singapore that the creation of consistent work opportunities results in SMCs' tremendous growth (Ofori & Lean, 2001). Ofori and Lean (2001) reveal that most of the Singaporean SMCs, which were supported in the 1990s by their government, have since morphed into large contractors that are competing internationally. Hence, several scholars advocate for the reservation of certain types of work for SMCs, preferential procurement treatment, streamlining of procurement processes, and provision of annual budget to create SMC jobs (Adediran & Windapo, 2017; Asante et al., 2018; Wentzel et al., 2022).

2.2.4 Conducive business environment

A plethora of studies show that the environment within which SMCs operate significantly influences their development and sustainability (Adel & Habib, 2018; Huda et al., 2018; Mamman, Bawole & Agbebi, 2019). As outlined by Santoso, Permana and Abdullah (2021), the business environment influences strategic planning, business performance, a firm's competitive advantage, corporate entrepreneurship, strategy innovation, entrepreneurial orientation, technology strategies, corporate sustainability, sustainable innovation, and sustainable entrepreneurship. Notably, the business environment comprises both external and internal business environment. The external environment includes the political, economic, policy, socio-cultural, as well as legal and regulatory environments, which should be conducive for SMCs to thrive (Eniola, 2020; Kamal et al., 2021). According to Bikitsha and Amoah (2022), these external factors need the intervention of the respective governments and relevant stakeholders to ensure the success of SMCs. The internal environment is characterised by the firm's organisational capabilities, owners or shareholders, internal structures, growth orientation or entrepreneurship culture, investment policies, and human resource policies, which are cardinal in stimulating SMC's growth (Anugwo & Shakantu, 2020).

2.2.5 The role of public and private sector institutions

Several studies highlight that collaboration between public and private institutions is fundamental in promoting development and SMCs' sustainability (Dapaah et al., 2017; Dar, Ahmed & Raziq, 2017; Songling, Ishtiaq & Ahmed, 2018). The key institutions that are encouraged to collaborate include financial institutions, government bodies, international development agents, contractors' association bodies, professional bodies, and training institutions. In a study in Tanzania, Lello and Mtendamema (2018) observed that the synergy among government, regulatory authorities, and building contractors enhances the growth of local contractors and the construction industry at large.

It is further reported that the government is primarily responsible for creating a conducive business environment within which SMCs could thrive (Anugwo & Shakantu, 2020; Bikitsha & Amoah, 2022). Critically, governments must formulate and implement appropriate policies, and friendly legal and regulatory framework that mitigate barriers in the business environment within which SMCs operate (Mamman et al., 2019). In addition, Songling et al. (2018) advise government bodies and policymakers to provide financial and non-financial support to SMCs. Numerous studies confirm that governments are the major contributors of work opportunities for SMCs in various countries (Adediran & Windapo, 2017; Dapaah et al., 2017; Thwala et al., 2018). Thus, government plays a vital role in stimulating the development and sustainability of SMCs.

Several studies reveal that governments cannot address all of SMCs' developmental needs without the private sector's participation (Amaeshi, Okupe & Idemudia, 2018; Idemudia & Amaeshi, 2019). These scholars argue that the private sector is the engine that should drive the development of SMCs, particularly in Africa. For instance, financial institutions are advised to play a significant role in availing adequate and affordable financing to SMCs (Domeher, Musah & Hassan, 2017; Hove, 2016; Taiwo et al., 2016). On the other hand, SMCs need to develop the requisite conditions such as proper record-keeping, sound financial management systems, as well as managerial and technical competencies to improve their creditworthiness with financial institutions. Secondly, SMCs clients should promptly pay SMCs for work done on sites, in order to stimulate their cashflows (Xie et al., 2019; Perera & Dewagoda, 2020). Xie et al. (2019) highlight that, even though contract provisions governing construction projects explicitly make it obligatory for clients to make prompt payment for work done, the vast majority of clients breach these provisions. To curb this, SMCs could consider engaging debt collectors or demand payment guarantees before commencing works on site.

2.2.6 Firm's entrepreneurial orientation

Several studies confirm that a firm's sustainability and entrepreneurial skills are inextricably linked (Weber, Geneste & Connell, 2015; Adel & Habib, 2018; Anugwo & Shakantu, 2020). In Australia, Weber, Geneste and Connell (2015) found that firm owner's entrepreneurial culture is paramount, since it directly influences the growth trajectory of the firm. This stems from the fact that the strategic decisions that a firm owner makes potentially stimulate or retard the growth of the enterprise, since the owner carries the growth vision of the organisation. This aligns with previous studies (Moreno & Casillas, 2007; Casillas & Moreno, 2010), which argue that there is a positive relationship between entrepreneurial orientation and firm growth. According to Casillas and Moreno (2010), a firm that exhibits entrepreneurial attributes such as innovativeness, risk-taking, proactiveness, and competitive aggressiveness has a high potential to grow and be sustained. Thus, SMCs need to adopt similar attributes to be sustainable. As suggested by Weber et al. (2015), reinvesting some of the earnings into the business operations is a fundamental practice that SMCs in developing countries should adopt, in order to sustain themselves.

Currently, there is hardly any evidence of studies that sought to identify the CSFs that could enhance SMC sustainability within the Namibian context. Most of the research from the Southern African region emanates from South Africa. Therefore, since CSFs often vary with context, as previously reported, there is a need to identify the CSFs that could underpin a contextually relevant SMCs' sustainability framework for the Namibian context.

 

3. MATERIALS AND METHODS

3.1 Research design

To provide a more nuanced understanding on the CSFs for sustainability of SMCs in Namibia, the study adopted a qualitative research design. Qualitative approaches allow participants to express themselves and clarify their thoughts with relatively few restrictions (Mohajan, 2018). Considering the limited research emanating from the Namibian context, a qualitative approach also positioned the study to potentially unearth any contextual-specific variables that could arise, as posited by several scholars (Rubin & Rubin, 2011; Creswell, 2013; Grbich, 2013). This was important, given that there is hardly any consensus on CSFs influencing the sustainability of SMCs (Hove, 2017). To probe the CSFs, the study employed face-to-face semi-structured interviews to gather data from 60 key informants in the Namibian construction industry. As suggested by Saunders, Lewis and Thornhill (2016), semi-structured interviews assist in asking predetermined questions and follow-up questions regarding CSFs. Through reflexive thematic analysis (Byrne, 2022), the authors uncovered the CSFs that informed the proposed framework for the sustainability of SMCs in Namibia.

3.2 Sampling and sampling procedures

The study population comprised SMCs, microfinance institutions, Ministry of Works and Transport, training institutions, contractors' association bodies, and construction professionals such as architects, quantity surveyors, and civil structural engineers in Namibia. The study used both snowball and purposive sampling. Snowball sampling technique is consistent with Offei et al. (2019) who confirm that the technique is most appropriate when confronted with difficulties in identifying the respondents who are acquainted with the phenomenon. Owing to the lack of a directory or comprehensive register of SMCs in Namibia, the authors created an initial list of potential participants. However, quantity surveyors, architects, and civil structural engineers were purposively drawn from a list of construction professionals registered under the Institute of Namibia Quantity Surveyors (INQS), Namibia Institute of Architects (NIA), and Engineering Council of Namibia (ECN). After purposively selecting the desired participants, they were contacted for interviews and asked to recommend peers who could participate in the study. The recommenders were then scrutinised, and purposive sampling applied. Purposive sampling was used to select participants most likely to yield appropriate and useful information that aligns with the objectives of the study (Campbell et al., 2020; Moo & Eyiah, 2020). In this case, the study sought to identify and include interviewees who were acquainted with the SMCs' needs. The study selected SMCs with varied educational qualifications and work experience, including owner-managers with a minimum of Grade 12 certificate and any work experience gained after the firm's inception, while that of registered construction professionals was a minimum of a bachelor's degree and ten years' working experience. The selection of participants from the financial institutions was based on their knowledge of financing options and lending criteria to companies. Consequently, the study involved 60 construction industry participants from Windhoek in the Khomas Region (central Namibia) and Oshakati in the Oshana Region (northern Namibia). Of the 60 participants, 45 were drawn from Windhoek, since most of the SMCs, government ministries, financial institutions, and construction professionals or consultants are headquartered in this city, while 15 were selected from Oshakati, which is predominantly rural with few locally based SMCs (see Table 1).

 

 

3.3 Data collection

The interviews probed what each of the interviewees considered as the main factors required to sustain SMCs in Namibia. The interview guide consisted of two sections. Section A contained guidelines and introductory remarks such as introducing the interview session with salutations, outlining the research and its purpose, and explaining the consent form and ethical considerations to the participants, as well as demographic information related to work experience and educational qualifications of the participants (see Table 1). Section B comprised the following key question: "What do you consider as the major factors for enhancing the sustainability of SMCs in Namibia?". The key question was augmented by follow-up questions. Face-to-face and telephone interviews were recorded through a voice recorder, while online interviews were video recorded through a laptop. In qualitative data collection, Creswell and Poth (2018) argue that 20 to 60 participants are sufficient to obtain data saturation, regardless of the homogeneity or heterogeneity of the study population. Therefore, in the current study, data saturation for SMCs was reached at the 20^th interviewee, while that of other population categories was reached at the 12^th interviewee. Despite reaching the data saturation earlier than Creswell and Poth's suggestion, the study conducted 28 more interviews to entrench data trustworthiness.

3.4 Data analysis

Data analysis for the interviewees' profile was done using Microsoft Excel (Divatia, Tikoria & Lakdawala, 2021). Descriptive statistics (frequencies and percentiles) were generated and reported. For the interview data analysis, data were transcribed, cleaned, coded, and analysed using thematic analysis. Specifically, due to the inductive nature of the study, reflexive thematic analysis was used, whereby the study approached the data-analysis process tabula rasa, that is, without any predetermined themes or categories (Bazeley, 2013; Grbich, 2013). After transcription, the researchers studied each transcript to relive the interview experience, and clean or clarify any ambiguities in the document. The next step involved seeking and identifying codes that were deemed relevant for the identification of CSF for SMC sustainability in Namibia. After the identification of codes, the researchers studied them for commonalities, grouping common or related codes into themes. This was an iterative process, which sometimes necessitated the deletion or moving of codes from one theme to the other, resulting in six main themes with 17 codes labelled as the main and critical success factors for SMCs. Descriptive statistics (frequency counts and percentiles) were generated to determine the emergent themes and report the relative importance (rank) of a particular theme (factor) (see Table 2).

 

 

4. RESULTS

4.1 Profile of interviewees

Table 1 shows the profile of the 60 interviewees indicating that, since the vast majority of construction activities and key stakeholders are based in Windhoek compared to Oshakati, 45 (75%) of the total participants (60) were drawn from Windhoek, while 15 (25%) were drawn from Oshakati. Interviews were conducted with 40 owner-managers of small and medium-sized contracting firms, one Director of Capital Projects Management from the Ministry of Works and Transport, one General Manager of the Construction Industries Federation of Namibia, two salespersons of microfinance institutions, two lecturers from training institutions, five registered quantity surveyors, four civil/structural engineers, and four architects. Despite the adopted qualitative approach, the data gathered from the two towns fairly reflected the geographical dynamics within the Namibian context.

The interviewees held various educational qualifications and work experiences. Of the 60 participants, nine (15%), who were all owner-managers of contracting firms, possessed Grade 12 certificates, while two (3%), five (8%), and six (10%) did short learning programmes, national certificate, and national diploma, respectively. Furthermore, 15 (25%) participants held bachelor's degrees and were all owner-managers of contracting firms. Of the 12 (20%) participants with honours' degrees, three were registered quantity surveyors, four were registered civil engineers, while five were owner-managers of contracting firms. Those with master's degrees were 10 (17%), and these comprised four registered architects, the director at Ministry of Works and Transport, the general manager of the Construction Industries Federation of Namibia, sales consultant at one of the financial institutions, a registered quantity surveyor, an owner-manager of a contracting firm, and a lecturer at a training institution. Only one participant, who was an architect, possessed a doctorate degree. Most of the participants (72%) across the population categories had six or more years' work experience. The level of educational qualifications, work experience and knowledge possessed by the participants on the challenges and needs of SMCs enabled them to provide relevant information for the study.

4.2 Sustainability success factors

From the thematic data analysis, results in Table 2 show that the study identified 17 CSFs and six main factors for the sustainability of SMCs in Namibia. It is important to note that the total counts for only the main factors were used to discuss the results, as interviewees may have mentioned more than one item for the same CSFs.

Factor 1: Public and private institutions' collaborative support

Ranked first, all the participants (100%) interviewed mentioned the need for collaboration between public and private sector institutions. Most of the participants proposed the establishment of an independent body which coordinates interventions from both the public and private institutions, in order to avoid fragmentation of programmes. For instance, P1 stated that "the best thing I would propose is an institution that only deals with SMC needs...". The notion was supported by P2, who averred that "the establishment of an independent SMC institution would assist in coordinating interventions for SMC development in Namibia". Expressing similar sentiments, an owner-manager (P26) of a contracting firm added that the independent body could assist in registering and monitoring SMCs to improve their performance. P26 posited:

the Construction Council will not only register contractors, but would also categorise contractors, to align the size of the contractor to the size of a project, thereby preventing large size contractors from working in the sphere of SMCs during tendering.

This view was prevalent among owner-managers and construction consultants. For instance, P41 (a registered quantity surveyor) acknowledged the dearth of contractors' categorisation in Namibia, which poses serious challenges to developing SMCs and, to a larger extent, the construction industry. P41 argued:

... you see that for now ... there are no categories, we have not categorised, we have no classifications of SMCs SMCs are still competing with those that are well established because of the absence of a well formulated policy.

In addition to the establishment of an independent regulatory body, the study found that there is a need for different institutions to collaborate in their quest to sustain SMCs. For example, an interviewee from the academic sector (P45) emphasised the importance of collaboration between government and training institutions such as universities and vocational training centres (VTCs) for SMCs to be effectively developed. P45 shared:

one would possibly have to look at some sort of partnership approach between government and learning institutions that could offer training opportunities that are really tailored for SMCs.

The need for a collaborative approach between the public and private sector, which was found in the current study, is widely supported by extant literature (Dapaah et al., 2017; Songling et al., 2018; Lello & Mtendamema, 2018; Bikitsha & Amoah, 2022; Dhliwayo et al., 2022a; 2022b). Dhliwayo et al. (2022a) argue that government's efforts need to be augmented by private sector institutions such as banks, material suppliers, and training institutions to ensure growth and sustainability of SMCs. As argued by some scholars (Hove, 2017; Borman & Janssen, 2013), who advance that CSFs for sustaining SMCs varies with context, the findings observed nuances within the Namibian context. Thus, the establishment of an independent statutory body responsible for overseeing SMC development and the collaboration between the public and private institutions is required to stimulate SMC development in Namibia.

Factor 2: SMC skills training

Ranked second in the analysis, 79% of the participants mentioned that training is one of the fundamental aspects that stimulate SMC development in Namibia. For instance, P28 stated that "SMCs need training in different areas". In concurrence, P39 opined that "the critical factor is skills development".

Most of the participants stated that the key training needs should include technical, financial, administrative, project management, marketing, as well as cost estimation and pricing. For example, P40 stated that "government should offer training on financial management". This was further supported by P42 who raised the importance of equipping SMCs with a basic knowledge of financing. P42 mentioned that "there is the basic need for any SME to obviously learn basic requirements such as financing Participants viewed this skill as lacking among most of the SMCs, thereby resulting in their high failure rate.

In addition, participants P36, P46, P55, and P58 emphasised the need to equip SMCs with contract administrative skills. For instance, P36 averrred that "when you are starting a company, obviously administrative challenges are inevitable". Failure to provide the requisite training is detrimental to the sustainability of SMCs. This was corroborated by P41, a government official, who attributed the poor performance of previous government interventions to the lack of training. P41 stated:

training is very critical. The government even tried to put [together] an association of contractors ... it did not succeed properly because of that aspect of training.

The need to train SMCs in pertinent skills, as observed in the current study, is widely supported by extant literature (Amoah & Bikitsha, 2021; Anugwo & Shakantu, 2020; Dapaah et al., 2017). Scholars such as Anugwo and Shakantu (2020) rate skills training as cardinal in stimulating SMC development. This notion is consistent with the sentiments of most of the participants within the Namibian context, who pointed out that training should be prioritised before awarding work to SMCs.

Factor 3: Enabling construction business environment

Several participants (64%) mentioned the need to create an enabling construction business environment to stimulate SMC development and sustainability in Namibia. Among the tools that could be used to create an enabling business environment are relevant regulations. Both owner-managers of contracting firms and construction consultants argued that the Namibian construction industry is unregulated; hence, the need for regulation to enhance the development of SMCs. For example, P26 stated that "we need to regulate the industry. [It] is very important that we regulate the industry

The sentiments share similarities with the views of P46, a quantity surveyor, and P54, an architect, who attributed the marginal development of SMCs to the absence of a proper regulation of the construction industry. P46 stated:

what I noted now is that there has not been extensive development in SMCs because the industry is not regulated. Everyone becomes a contractor without skills.

Various suggestions to create a conducive business environment were put forward, such as the need to establish an independent statutory body, grade contractors, and implement monitoring, evaluation, and contractor performance review mechanisms. For instance, P6 stated:

we need to regulate the industry ... Most of the government programs in terms of SME development are well intended but regulation thereof is absent and that is the reason why we have failed as a nation .

This is supported by P30 and P31 who pointed out that the industry is not regulated. P30 argued as follows:

we have problems since independence until now to regulate the construction industry ... We have different people from different industries entering the construction industry without even having the know-how, [as in how] to do and carry out this construction process.

As a result, the participants argued that lack in proper regulation of the industry led to high failure rates among SMCs over the past 30 years. Hence, P26 suggested that the sustainability of SMCs could only be attained through the right legislative framework. P26 added that "a sustainable future for SMCs is attainable, provided that there is the right legislative environment in place".

A plethora of studies (Dapaah et al., 2017; Songling et al., 2018; Lello & Mtendamema, 2018; Bikitsha & Amoah, 2022) acknowedge that government should primarily create an enabling construction business environment within which SMCs could thrive. This is supported by several studies from various developing countries such as South Africa (Bikitsha & Amoah, 2022), Tanzania (Lello & Mtendamema, 2018), and Indonesia (Huda et al., 2018; Santoso et al., 2021), which affirm the pivotal role of the government in developing SMCs. For instance, the establishment of independent regulatory bodies such as the Construction Industry Development Board (cidb) of South Africa, Malaysia, and Singapore largely transformed the performance and longevity of SMCs in those respective countries, with some having graduated to larger contractors (Ofori & Lean, 2001; cidb of South Africa, 2022). This demonstrates that regulating the construction industry has a direct positive influence on the growth and sustainability of SMCs, particularly in developing countries.

Factor 4: Access to adequate and affordable finance

Over half of the participants (57%) mentioned that SMCs in Namibia require adequate and affordable finance for them to run their businesses successfully. P13 stated that "the problem of SMCs can be largely solved if we make finance available to them".

Although financing was deemed to be crucial, the findings reveal that the vast majority of financial institutions were reluctant to finance SMCs, due to perceived risks. As a result, financial institutions often attach prohibitive conditions to financing schemes. Most of the participants complained about high interest rates, unreasonably high collateral/security, low loan threshold, among other stringent conditions that need to be relaxed. For instance, P16 stated that there is a "need to relax conditions that are currently set by the Development Bank of Namibia and commercial banks". Furthermore, P24 suggested that banks should increase the financial threshold, stating:

. [banks] need to increase their support and . just try and meet businesses halfway because at the end of the day these businesses do bring business to the banks and that is why they exist.

In addition, some participants suggested the introduction of dedicated financial institutions such as the now defunct SME Bank that was liquidated in 2017, due to alleged mismanagement. For example, P25 mentioned that there is a "need to bring back SME bank". Likewise, P39 remarked that these SMCs "need a dedicated financial institution".

While P47 also supported the idea of a dedicated financial institution, the participant argued that it might not work if contractors' financial management remains poor, and thus encouraged SMCs to repay loans to make that dedicated financial institution viable. To elaborate, P47 stated:

if there is no good financial management from the contractors' side ... I am not sure whether dedicating the financial institution to assist SMCs would help if they are going to continue to default ...

In addition, some consultants advocated for a tailor-made financing option to cater for SMCs' financial needs. For instance, P48 stated:

... there is need for a tailor-made loan system that accommodates them in their small way with lenient terms . with low interest rates. I think this will go a long way in helping these guys.

P51 suggested the implementation of project-based finance, in which financiers use the project as a form of security. Furthermore, some owner-managers and consultants highlighted the need for clients to promptly pay for completed and certified works, in order to improve SMC's cashflows. P38 stated that "SMCs need [to] be paid promptly", as this could be supportive of SMCs operations. Likewise, P47 shared that "prompt payment is very critical ... In government, prompt payment does not work as well as it should".

The need for SMCs to access adequate and affordable finance is well-documented in extant literature (Mafimidiwo & lyagba, 2016; Domeher et al., 2017; Anamege, 2019). These scholars reveal that personal savings, which are commonly employed to finance most of the SMCs projects, are inadequate in meeting their financial needs. The view is consistent with the assertion of most of the participants who argued that construction projects are capital intensive, hence require a combination of personal savings and external funding (Offei et al., 2019; Perera & Dewagoda, 2020; Xie et al., 2019).

Factor 5: Consistent work supply

Several participants (43%) identified consistent work supply as important for SMCs' continued survival. For instance, P10 mentioned that it is important "to have some continuity in terms of workflow ... to motivate SMCs to invest into the business". Likewise, a few other participants concurred, with P25 saying:

there should be consistent work supply ... because I can get a very good project today after two years, I am done with it and there is nothing on the plate. Which means already I am going to lay off some people. Will I grow like that?

To provide consistent work opportunities, P1 suggested that the government should set aside certain work for local SMCs. P1 averred:

the best thing is for the government must have a deliberate policy that might be skewed towards nationalism, where they say every tender below 5 million, we will give it to these SMCs.

Numerous scholars, who cite consistent work supply as a catalyst for SMCs' growth and survival, confirm that consistent work supply is critical to sustain SMCs in Namibia (Adediran & Windapo, 2017; Amoah & Bikitsha, 2021; Songling et al., 2018). However, some participants disputed the arbitrary awarding of work to SMCs, arguing that this should be commensurate with their performance.

Factor 6: Firm owner's entrepreneurial skills

Few participants (22%), who largely comprised of construction consultants, highlighted the firm owner's entrepreneurial culture as a key determinant of SMCs' success. The study revealed that firm owners make strategic decisions that can promote or limit firm growth. For instance, P24 stated:

Firm owners' entrepreneurial culture is also another driver. The owner must be someone who is self-driven and someone who really does not give up easily because construction can be very complex and complicated.

Furthermore, P25 opined that people who are grounded in an entrepreneurial culture from a young age would grow up knowing how to run a profitable business. By implication, an owner-manager of a contracting firm should develop an entrepreneurial mindset to direct the firm towards its growth and longevity. In supporting the latter, P31 pointed out that SMCs should reinvest some of their earnings into their businesses for them to witness growth and sustainability, arguing that most of these enterprises squander business money and end up bankrupt. P31 shared:

Most of the SMCs eat money unnecessarily without thinking about the future of the business. Our firm survived for decades, including the effects of COVID-19 because of reinvesting some of the profits into the business. This is critical for the survival of the small contractors.

In concurrence, P45 (a quantity surveying consultant) cited that SMCs need financial discipline and learn to plough back their earnings into the business since this is a recipe for their sustainability. In reference to SMCs, P45 averred that:

These small companies think that the construction business is a cash cow which does not cease to be milked. It's not the case. They need to grow their businesses by ploughing back some of their monies in order to be sustained, as opposed to their current behaviour of eating everything including the seed.

Some scholars (Weber et al., 2015; Arthur-aidoo et al., 2018; Anugwo & Shakantu, 2020) concur with the findings that firm owner's growth orientation dictates the growth trajectory of the firm. However, it should be noted that, while commonality occurs among the factors deemed as critical within the Namibian context and other settings, the level of importance varies with each context, as suggested by Borman and Janssen (2013: 101), who contend that "some CSFs are likely to tend towards universality while there are others which are likely to be context dependent".

Based on the sentiments raised by the participants, reinvestment into the business is one of the critical factors for firm growth and sustainability.

 

5. DISCUSSION

This study sought to identify the CSFs that could enhance SMCs' sustainability in the Namibian construction sector. The results of this study have theoretical and practical implications for scholars and practitioners alike.

5.1 Theoretical implications

5.1.1 Creating a conducive construction business environment

Interviewees cited the absence of independent regulatory body, lack of contractor registration and grading, as well as the dearth of monitoring and evaluation mechanisms as important factors contributing to the poor performance and unsustainability of most of the SMCs in Namibia. Extant literature shows that the establishment of independent regulatory bodies such as the Construction Industry Development Board (cidb) in South Africa, Malaysia, and Singapore largely transformed the performance and sustainability of SMCs in those respective countries, with some having graduated to larger contractors (Ofori & Lean, 2001; cidb of South Africa, 2022). This demonstrates that regulating the construction industry has a direct positive influence on the growth and sustainability of SMCs, particularly in developing countries. Consequently, it is critical for the Namibian government and relevant stakeholders to properly regulate the construction industry, in order to stimulate SMCs' development and sustainability.

5.1.2 Skills training

The results of the study reveal that it is critical that SMCs be equipped with pertinent skills which include technical, financial management, administrative, and project management skills, as well as marketing strategies, and cost estimation and pricing. The need to train SMCs in pertinent skills as observed in the current study is widely supported by extant literature (Amoah & Bikitsha, 2021; Anugwo & Shakantu, 2020; Dapaah et al., 2017). It was noted that past failures by SMCs in Namibia emanated from awarding work opportunities to entities which lacked skills to successfully execute such works. Thus, the anomaly could be the major contributor to the failure of most of the contractor development programmes (CDPs) previously tailor-made for SMCs in Southern Africa, as posited by Dapaah et al. (2017). In a study focusing on assessing the effectiveness of CDPs in South Africa, Dapaah et al. (2017) found that most of the CDPs underperformed, largely due to insufficient skills training. This is further corroborated by Mafundu and Mafini (2019), who observed that various interventions made towards empowering Black-owned SMCs in South Africa failed, due to deficiencies in technical skills. As such, SMCs in Namibia need to be capacitated with various skills for them to thrive.

5.1.3 Access to adequate and affordable capital finance

The results of this study show that the vast majority of SMCs experience lack of capital finance to support their operations. Most of the participants cited the lack of collateral, high cost of capital, low credit threshold, and stringent conditions as major impediments towards SMCs' access to adequate and affordable finance from the formal financial market. As a result, SMCs largely use personal savings to finance their projects. As argued by Anamege (2019), personal savings are inadequate, since the construction projects are capital intensive and thus require a combination of personal savings and external funding. Domeher et al. (2017) posit that SMCs use personal savings, due to the financial institutions' reluctance to support them. They perceive such entities as high risk. This is corrobrated by the results of the study which show that local banks within the Namibian context have negative perceptions towards financing SMCs. To provide access to adequate and affordable capital finance, the framework proposes four strategies, including the establishment of a dedicated financial institution, tailor-made financial options, clients' prompt payments for completed works, and SMCs' consistent repayment of debts. Perera and Dewagoda (2020: 236) argue that "payment is the life blood of construction projects". By extension, prompt payment greases the SMC's liquidity which, in turn, catalyses the firm's performance. Xie et al. (2019) note that delayed payments could bankrupt a SMC, considering that such entities have limited financing options. However, some scholars are skeptical regarding dedicated financial institutions (Domeher et al., 2017; Hove, 2016; Taiwo et al., 2016). This skeptism emanates from the bad experiences associated with past interventions in several developing countries. For example, in the Ghanaian context, Eyiah and Cook (2003) contend that the Bank of Housing and Construction (BHC) of Ghana, which was introduced in the early 1990s to assist local contractors, experienced huge losses, due to malpractices and failure by the beneficiaries, particularly SMCs, to pay back their loan facilities. Consequently, the bank reviewed its lending conditions and began to impose stringent measures against SMCs to curb such perceived risks. While the idea of a dedicated financial institution is noble, stringent measures need to be implemented to avoid a recurrence of malpractices that led to previous failures, as posited by Eyiah and Cook (2003). From the study, it was observed that there is a need for a dedicated financial institution, tailor-made financing option, prompt payments, and SMCs' repayment of debts, in order to provide adequate and affordable finance to SMCs in Namibia.

5.1.4 Consistent work supply

Numerous scholars confirm the finding that consistent work supply is critical to sustain SMCs in Namibia. They cite consistent work supply an a catalyst for SMCs' growth and survival (Adediran & Windapo, 2017; Amoah & Bikitsha, 2021; Songling et al., 2018). However, some participants disputed the arbitrary awarding of work to SMCs, arguing that this should be commensurate with their performance. Thus, continuous performance evaluation should be conducted to ensure sustainable provision of work as posited by Dapaah et al. (2017). Dapaah et al. (2017) observed that consistent work opportunities and continuous mentorships are more critical in developing SMCs in South Africa. However, the importance of government in stimulating SMC sustainability remains undisputed. Thus, the study observed that practices for SMCs to secure projects is critical in sustaining SMCs in Namibia.

5.1.5 Owner/manager's entrepreneurial culture

The results of the study show that the vast majority of owner/managers of SMCs establish their business for subsistence purposes, without the vision to grow such entities to large enterprises. Consequently, such firms remain stagnant, regardless of any growth-oriented intervention. This aligns with several scholars (Weber et al., 2015; Arthur-Aidoo et al., 2018; Anugwo & Shakantu, 2020), who suggest that firm owner's growth orientation dictates the growth trajectory of the firm. However, it should be noted that, while commonality occurs among the factors deemed as critical within the Namibian context and other settings, the level of importance varies with each context, as suggested by Borman and Janssen (2013: 101), who contend that "some CSFs are likely to tend towards universality while there are others which are likely to be context dependent".

5.1.6 Collaboration between public and private sector institutions

The results of the study show that government's efforts need to be augmented by private sector institutions such as banks, material suppliers, and training institutions to ensure the growth and sustainability of SMCs. Government should provide the right regulatory framework that enables SMCs to thrive, as revealed by several scholars (Songling et al., 2018; Lello & Mtendamema, 2018; Bikitsha & Amoah, 2022). To achieve this, extensive consultation with the private sector should be undertaken. On the other hand, it is critical for private sector institutions such as training institutions, financial institutions, material suppliers, and construction professional consultants to collaborate with the public sector to ensure that SMCs receive the necessary support such as pertinent skills, capital financing, and construction materials to effectively address their sustainability. Hence, all relevant stakeholders should coalesce to sustain SMCs in Mamibia.

5.2 Practical implications of the study

The study has a few practica implications. First, the results provide useful insights that could guide policy and practice aimed at improving SMC sustainability within the Namibian context. The results suggest a need for government to provide supportive policies and regulations that could promote a conducive business environment, access to markets, and offering incentives for sustainable practices. Furthermore, the results could be used as a guide to direct not only government efforts but also contractor's efforts to improve SMCs' sustainability. Effective regulation and enforcement of the results ensure adherence to sustainability standards that could also lessen the faiiure rate of SMCs and simultaneously improve SIMC viability, fostering a culture or accountability in Namibia's construction sector Thus, the results were used to develop a proposed framework for SMIC's sustainability in Namibia (see Figure 1).

 

 

6. PROPOSED FRAMEWORK FOR SMC'S SUSTAINABILITY

The framework advances that the six CSFs should be integrated to stimulate the meaningful development and sustainability of SMCs in Namibia. As argued by Ofori (1980), adopting a single factor such as capital financing without other critical factors such as skills training and provision of work opportunities yields hardly any success in the quest for SMC business reinvestment in Namibia. For instance, the extant literature claims that the environment, within which the SMC operates, influences its performance and survival (Santoso et al., 2021; Bikitsha & Amoah, 2022). Hence, a conducive business environment is critical for the sustainability of SMCs (OECD, 2019; Anugwo & Shakantu, 2020). The creation of a conducive business environment is a concerted effort, requiring the input from key stakeholders such as government and the private sector (OECD, 2019; Anugwo & Shakantu, 2020). Some scholars opine that no amount of effort would sustain SMCs unless such effort is combined with a positive entrepreneurial mindset (Casillas & Moreno, 2010; Lello & Mtendamema, 2018; Weber et al., 2015). Business reinvestment requires SMCs to invest in SMC development programmes that improve their capabilities, capacity, operational efficiency, and grading status and adopt SMC sustainability programmes that focus on environmental adaptability, capacity building, and maintenance of low gearing. Through strategic business reinvestment, Namibian SMCs can secure their future success and contribute to sustainable development.

6.1 Creating a conducive construction business environment

As reported by several studies (Songling et al, 2018; Lello & Mtendamema, 2018; Bikitsha & Amoah, 2022), both external and internal business environments should be considered in enhancing development and sustainability of SMCs. As noted by Wang, Cui and Dong (2023), the business environment is composed of four environments, namely market, governmental, legal and policy, and human environments, all of which should provide favourable conditions to the actors operating in that business environment. For example, a stable market environment ensures a steady flow of construction projects, sustaining SMCs' operations and growth. Government support through favourable policies, regulations, and incentives encourages investment and innovation within the sector. Clear and fair legal frameworks promote trust and transparency, fostering a level playing field for SMCs. In addition, nurturing a skilled workforce through education and training programmes enhances productivity and quality of work. Therefore, the CSFs framework proposes four strategies to create a conducive construction business environment for SMCs, including the establishment of a regulatory body, registration of contractors, grading of contractors, as well as monitoring, evaluation, and upgradation of contractors. Establishing an independent regulatory body to oversee industry standards and practices ensures accountability, transparency, and adherence to industry standards.

Mandatory registration and grading of contractors ensure accountability and quality assurance, instilling confidence in clients and stakeholders. Regular monitoring, evaluation, and upgradation processes help identify areas for improvement, driving continuous growth and professionalism within the sector. By implementing these strategies, Namibia can foster a transparent, competitive, and supportive environment for SMCs to thrive, attracting investment, promoting innovation, and ultimately contributing to sustainable economic development. The adoption of the stated strategies has the potential to leverage the business environment that could stimulate the growth and sustainability of SMCs in Namibia.

6.2 Skills training

SMCs need to possess a wide range of pertinent skills, in order to successfully execute their projects (Amoah & Bikitsha, 2021; Anugwo & Shakantu, 2020). The CSFs framework proposes six pertinent skills for SMCs in Namibia, namely technical, financial management, administrative, and project management skills, as well as marketing strategies and cost estimation and pricing. Technical skills are fundamental for executing construction tasks efficiently, ensuring quality workmanship and client satisfaction. Financial management skills enable SMCs to allocate resources wisely, maintain financial stability, and seize growth opportunities. Administrative skills streamline operations, enhance productivity, and ensure compliance with regulations and contracts. Project management skills facilitate effective planning, scheduling, and execution of projects, minimising delays and cost overruns. Marketing strategies help SMCs to differentiate themselves, attract clients, and secure contracts in a competitive market. Cost estimation and pricing skills ensure accurate budgeting, profitability, and competitiveness when bidding for projects. Together, these skills form the backbone of SMCs' development and sustainability in Namibia's construction industry.

Scholars such as Dapaah, Thwala and Musonda (2017) confirm that, if SMCs are awarded work without prior training of pertinent skills, they would perform poorly and consequently shut their businesses within a short period of time. Investing in comprehensive training programmes equips SMCs with the expertise necessary to meet evolving industry standards and client demands. They empower SMCs to deliver high-quality work, manage resources efficiently, navigate challenges effectively, and sustain long-term growth, contributing to the overall economic prosperity of Namibia.

6.3 Access to adequate and affordable capital finance

Capital finance is one of the critical factors to stimulate SMC development and sustainability. With sufficient funding, SMCs can invest in equipment, technology, and skilled labour, essential for undertaking projects efficiently and competitively. Affordable financing options enable SMCs to mitigate financial risks and maintain liquidity, especially during economic downturns. Moreover, access to capital allows SMCs to expand their operations, pursue growth opportunities, and diversify their service offerings. Rwelamila and Ogunlana (2015) opine that African governments and financial institutions should formulate mechanisms to provide appropriate finance to SMCs in their respective countries. Ideally, banks should ease lending conditions, reduce interest rates, and increase lending thresholds for SMCs (Anigbogu et al., 2014; Ovat, 2016). Financial institutions are encouraged to customise financing options suitable for SMCs (Gbandi & Amissah, 2014; Imafidon & Itoya, 2014). As indicated by Perera and Dewagoda (2020: 236), "payments are the lifeblood of construction projects". If persistent payment delays occur, Xie et al. (2019) contend that this could result in SMCs' liquidation. Therefore, in view of the results of the study, the framework proposes four measures to address the financing needs of SMCs in Namibia. These include the establishment of dedicated financial institutions for SMCs, banks to offer tailor-made financial support for SMCs, clients to make prompt payment for work done by SMCs, and SMCs to make consistent repayment of debts.

The establishment of a dedicated financial institution ensures tailored financial solutions, including loans and credit facilities, designed to meet the unique needs of these businesses. Banks offering tailor-made financial support provide SMCs with access to capital for investment in equipment, technology, and skills development, crucial for their growth and competitiveness. Prompt payment from clients for work completed by SMCs is vital for maintaining cash flow and operational stability. It allows SMCs to meet their financial obligations, invest in ongoing projects, and pursue new opportunities without facing liquidity challenges. Consistent repayment of debts by SMCs ensures financial discipline, builds trust with lenders, and strengthens their creditworthiness. This, in turn, enables SMCs to access additional financing at favourable terms, fuelling further expansion and development. Collectively, these measures support the development and sustainability of SMCs in Namibia by providing them with the financial resources and stability needed to thrive in a competitive business environment, contribute to economic growth, and create employment opportunities.

6.4 Consistent work supply

The provision of consistent work ensures stable revenue flows, allowing SMCs to plan and allocate resources efficiently (Alkilani & Loosemore, 2022), thereby enhancing their sustainability. Mechanisms to provide consistent work (for example, collaborative efforts between public and private sectors to streamline procurement processes and promote local content) can contribute to ensuring consistent work supply for SMCs (Windapo, 2018; Anugwo & Shakantu, 2020; Amoah & Bikitsha, 2021). Therefore, the framework proposes strategies for consistent work supply such as preferential procurement treatment, reservation of certain types of work, streamlining procurement processes, and establishing dedicated annual budget meant for SMC job creation. Preferential procurement treatment ensures that SMCs have fair access to government contracts, promoting inclusivity and fostering growth within the sector. Reservation of certain types of work guarantees a share of projects for SMCs, providing them with opportunities to gain experience and build their portfolios. Streamlining procurement processes reduces bureaucratic hurdles, allowing SMCs to compete more effectively for contracts and execute projects efficiently. Establishing dedicated annual budgets for SMC job creation demonstrates the government's commitment to supporting small businesses, stimulating economic activity, and fostering employment opportunities.

6.5 Owner/manager's entrepreneurial culture

There is overwhelming evidence linking the success of the firm to its owner's entrepreneurial skills (Weber et al., 2015; Adel & Habib, 2018; Dvouletý, Srhoj & Pantea, 2021). This is premised on the fact that the owner/manager makes strategic decisions that could influence the growth direction of the business, as noted by Weber et al. (2015). This is corroborated by a study in Tanzania, focusing on the impact of pull-and-push factors on SMCs' growth (Lello & Mtendamema, 2018). Lello and Mtendamema (2018) found that entrepreneurial orientation exerts a great influence on the growth and sustainability of the firm. This is consistent with findings of earlier studies (Moreno & Casillas, 2007; Casillas & Moreno, 2010), which confirm that entrepreneurial orientation and firm growth are positively correlated. Therefore, the framework proposes attributes of entrepreneurship for SMC's success, including innovativeness, risk-taking, proactiveness, and competitive aggressiveness, which are catalytic to the growth and sustainability of a firm. Skills such as understanding clients, suppliers, pricing, and the industry are essential to the success of SMCs.

Innovativeness allows SMCs to differentiate themselves by adopting new technologies, materials, and construction methods, enhancing their competitiveness and market appeal. Risk-taking enables SMCs to seize opportunities, undertake challenging projects, and expand their business horizons, driving growth and profitability. Proactiveness ensures that SMCs anticipate market trends, adapt to changing conditions, and capitalise on emerging opportunities, positioning them for long-term success. Competitive aggressiveness motivates SMCs to pursue contracts, negotiate favourable terms, and assertively market their services, maximising their market share and revenue potential. Understanding clients' needs, suppliers' capabilities, pricing dynamics, and industry trends enables SMCs to deliver value-added solutions, forge strategic partnerships, and maintain a competitive edge in the market. Together, these entrepreneurial skills empower SMCs to navigate challenges, capitalise on opportunities, and achieve sustainable growth in Namibia's construction sector.

6.6 Collaboration between public and private sector institutions

Several studies from various developing countries such as South Africa (Bikitsha & Amoah, 2022), Tanzania (Lello & Mtendamema, 2018), and Indonesia (Huda et al., 2018; Santoso et al., 2021) affirm the potential of a collaborative approach in engendering SMC sustainability. The framework proposes that both government and private sector institutions create a synergy to stimulate the development and sustainability of SMCs in Namibia. As noted by several studies (Dapaah et al., 2017; Alkahtani, Nordin & Khan, 2020; Asante et al., 2018), government should provide financial and non-financial support to SMCs. Government bodies establish policies, regulations, and infrastructure projects that directly impact on SMCs' operations and opportunities. By working together, they can create an enabling environment for SMCs, facilitating access to financing, streamlining procurement processes, and providing technical assistance.

Government efforts should be supported by private sector institutions such as banks, material suppliers, and training institutions to ensure the growth and sustainability of SMCs. Private sector institutions bring expertise, innovation, and investment that complement government efforts. Collaborative initiatives between the two sectors foster knowledge exchange, technology transfer, and market insights, empowering SMCs to adapt to changing industry dynamics and embrace sustainable practices. By leveraging the strengths of both government and private sector institutions, collaboration enhances the resilience, capacity, operational efficiency, grading status, and long-term viability of SMCs in Namibia, driving economic growth and sustainable development.

6.7 Business reinvestment

In the construction industry, contracting firms are sustained if they strategically reinvest some of their earnings into the business operations, as suggested by a plethora of studies (Moreno & Casillas, 2007; Casillas & Moreno, 2010; Weber et al., 2015). The relationship between SMC development, sustainability, and business reinvestment forms a cyclical process crucial for the growth and resilience of SMCs in Namibia. Reinvesting profits into technology upgrades, skills training, and sustainable practices ensures long-term competitiveness and resilience. Upgrading equipment and adopting innovative construction methods enhances efficiency and quality, enabling SMCs to deliver projects more effectively. Investing in workforce development programmes fosters a skilled and motivated team, driving productivity and customer satisfaction.

As SMCs prioritise sustainability, they strengthen their reputation, attract more clients, and secure larger contracts, fuelling further growth and development. Concurrently, reinvesting profits into business upgrades, equipment modernisation, and workforce development sustains this cycle of improvement. By continuously reinvesting in their businesses, SMCs ensure their long-term viability, adaptability, and competitiveness in Namibia's construction industry, contributing to economic growth and sustainable development. This cyclical relationship underscores the importance of holistic approaches to SMC development, sustainability, and business reinvestment. Therefore, the proposed framework is envisaged to improve the successful delivery of projects and sustainability of SMCs in Namibia.

 

7. CONCLUSION

The purpose of this study was to explore the critical success factors for the sustainability of SMCs in Namibia, in order to inform a framework for enhancing SMC sustainability in the country. The study identified 17 factors that were condensed to six clusters, namely public and private institutions' collaborative support, skills training, enabling construction business environment, access to adequate and affordable financing, consistent work supply, and firm owner's positive entrepreneurial culture. The study demonstrated the importance of incorporating these CSFs in the framework for guiding SMC development and sustainability in Namibia.

Although each of the identified factors has a direct positive influence on SMC development and sustainability, the study found that these factors should be integrated to enhance SMC sustainability. Essentially, the study noted that addressing the identified factors in isolation results in hardly any success, due to numerous sustainability challenges facing SMCs. For instance, while collaboration of government and private sector institutions is critical to assist in developing inclusive, holistic, and context-specific SMC policies and interventions, this should be supported by a conducive operating environment. SMCs will always struggle to survive in a harsh business environment, even if other critical factors are provided. The mentioned factors should be further supported by the training of SMCs in pertinent skills, and the provision of adequate and affordable capital financing. The study found that the provision of adequate and affordable financing to SMCs, without capacitating them with the prequisite skills and consistent work supply, would not sustain them. In addition, the study demonstrated that these efforts should be reinforced by consistent work supply and owner/manager's entrepreneurial acumen to attain SMC sustainability. The owner's entrepreneurial mindset fundamentally influences the growth trajectory of a firm, such that, even if most of the critical factors are addressed, the SMC might not be sustained if it possesses a negative entrepreneurial mindset. Therefore, by integrating the identified CSFs in the proposed framework, SMCs can be effectively developed and sustained.

Currently, there is no independent regulatory body such as cidb of South Africa or Malaysia to oversee the development of SMCs in Namibia. This appears to have stiffled the sustainability of SMCs in this context. As such, the identified CSFs and the developed framework provide insights into how the construction business environment could be regulated. For example, policymakers could use the findings to amend the SME policy so that it becomes responsive to SMCs' growth needs in Namibia. The Namibian government and relevant stakeholders could also use the findings to establish a regulatory body and supportive legislative framework to effectively regulate the construction industry. The implementation of the proposed framework could improve the performance of SMCs in Namibia, and thus stimulate their sustainability.

The results align with literature indicating that many of the extant CSFs are relevant across different contexts. Namibian stakeholders may leverage the findings of this study to improve SMCs' sustainability, thereby improving socio-economic development. The context-specific framework may provide useful insights for scholars and practitioners from other contexts, although any attempts at generalisation need to be judicious.

The identified CSFs should be integrated to realise effective SMC development and sustainability. As such, the selective adoption of the stated CSFs is likely to yield limited benefits, hence the need for a holistic approach.

However, this study is not without limitations. The fact that the study employed a qualitative approach with a limited sample size and based on the Namibian context means that the findings may not be generalised to other settings. Nevertheless, owing to the vacuity of simiar studies from the context, the aim of the study was not to generalise but to provide baseline insight which could inform future studies. Future studies may adopt a quantitative design, in order to se a bigger sample size to allow for generalisations. The results are also limited to SMCs. Thus, future studies may also focus on larger corporations as they play an important role in the Namibian construction industry.

 

8. ACKNOWLEDGMENTS/FUNDING

This research is funded by and part of collaborative research at the Centre of Applied Research and Innovation in the Built Environment (CARINBE). The authors acknowledge the contribution of the reviewers and editor-in-chief.

 

9. DECLARATION OF INTEREST STATEMENT

The authors declare no conflict of interest.

 

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Received: December 2023
Peer reviewed and revised: May 2024
Published: June 2024

 

 

DECLARATION: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.