Risk Factors Affecting the Construction Industry in Ghana

The issue of risk management has become pivotal in the planning and execution of construction projects globally. The current economic situation in Ghana, like that of other developing countries, requires all project contractors to manage such potential risks themselves. The study sought to use a survey and the theory of risk constraint to rank the major risk factors that affect the construction industry in Ghana, which eventually delay the delivery period and increase the overruns. The post-positivist perspective and research worldview, the quantitative research approach was employed in this study to arrive at a single and reliable truth with precision and accuracy, while using descriptive survey design. The survey questionnaires were distributed using a simple random approach to 118 respondents, of which 113 were received in a good state to be used in the study. The data were analysed using the relative importance index (RII) tool after a successful pilot testing to determine appropriate reliability and validity thresholds. Overall, the results revealed that construction design risk factors are the most important factor affecting the construction industry in Ghana, followed by financial and technical risk factors. The study further revealed that the “slow payment by clients†is the most important financial risk factor that affects the construction industry in Ghana, with an RII score of 0.94. It was also found that the “high interest rate†(RII = 0.77) and “Exchange rate fluctuation†(RII = 0.70) are the second and third most critical financial risk factors that affect the construction industry in Ghana. The RII results further showed that political and regulation risk factors are not among the important factors that influence the construction industry in Ghana. Project contractors, therefore, ought to be mindful and smart technically, financially, and politically when executing publicly funded building projects to avoid cost and duration overruns.