Globalization challenges on local small and medium scale construction firms in Tanzania

The main objective of this study has been to investigate and identify weaknesses faced by local contractors. Specifically, the study intended to investigate managerial capability, financial capability and technological capability of local contractors as compared to foreign contractors; and investigate whether political influences weaken or strengthen local small and medium scale contractors . The research was carried in Dar es Salaam region and involved the local small and medium scale contractors. A structured undisguised questionnaire was used as basic tool for collection of primary data, secondary data collected from various sources and both were used in the analysis of the main key elements of this study The results from this study show that entry of foreign construction firms into the local economy has not speeded technological transfer to local firms. There is little partnership or sub-contracting of construction activities between local and foreign construction firms. It was observed that most of bidding conditions imposed do not favour local firms. Most of the hindering problems facing small and medium local construction firms in Tanzania were poor access to credit, high cost of construction equipment’s, poor technology, and poor managerial capabilities. These problems claim to cause technical capability to participate in most of construction projects including foreign funded projects. It was recommended to put special opportunities and priorities to local construction firms to protect local construction firms. Polices on lending or leasing, subcontracting of works to small and medium construction firms have to be prioritized to enable them to compete with foreign firms. Policy makers need also to put in place conditions for the operations of foreign firms that will enable local firms to learn acquire technology from foreign firms.