ZAMBIA needs to embrace the drastic shifts in the local economic landscape created by COVID-19 to build a stronger economy post the pandemic, says Stanbic Bank chief executive officer Leina Gabaraane.
And Lafarge Zambia CEO Jimmy Khan says there has been a marked shift in the local construction sector as there was a sharp increase in small projects.
Speaking during a recent Stanbic Anakazi Online Conversations webinar, Gabaraane noted that the COVID-19 pandemic had resulted in the creation of new commercial sectors despite stifling others.
“There is no doubt that we will see a drastic change in our economic landscape going forward. But the question is, how do we as country adapt and take advantage of this pandemic to restructure our economy and stimulate new growth sectors?” he said in a statement availed by Langmead Media.
Gabaraane said one of the industries that had been heavily impacted by the virus was the real estate sector.
He noted that despite being in a precarious position due to reduced demand for commercial floor space, there remained plenty of room for growth in real estate.
“Thanks to social distancing and people working from home, we now have fewer people coming into our buildings. We expect this trend to continue even after the outbreak for several businesses that have effectively utilised the digital sphere to make remote working a success,” Gabaraane said. “And as we settle into this new way of doing business, many companies are starting to ask themselves if they need all the floor space they had before the outbreak. This is worrying because there is so much capital tied into Zambia’s real estate sector.”
He noted that shrinking demand for office space could create an opportunity in the residential market as a rise in demand for houses with enough space for a homebased office was anticipated.
“So the question is, are we willing to seize the opportunity of converting office space to residential houses with inbuilt working areas or indeed start building residential houses with their own workspaces?” Gabaraane asked.
Gabaraane added that as the market moved towards smaller projects during the COVID-19 era, financial institutions had the responsibility of supporting this growth by ensuring capital flowed to where it was needed most.
And Khan said there had been a marked shift in the local construction sector as there was a sharp increase in small projects while major infrastructure projects ground to a halt across the country
“What we are seeing is that as people are staying home, they suddenly have surplus resources that would have otherwise been spent on social events,” Khan said. “These funds are now being channelled towards domestic real estate projects. More people are now building their own houses or simply expanding their existing structures. This is a solid investment as it is a kind of inflation hedging on their part.”
He said with the market shifting to smaller projects, stakeholders must find ways to stimulate this new dynamic and keep the real estate industry viable.
“As a cement manufacturer, we will be creating a new product specifically suited to domestic construction to increase efficiency and lower the cost,” said Khan.