Construction World March 2016

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According to a recent report by PwC, Nairobi in Kenya is the number one city of opportunity for investors in sub-Saharan Africa.

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Despite the fact that Africa’s larger economies have been adversely affected by especially the collapse in commodity prices and the cooling down of the Chinese economy, there are still some enclaves in these economies that provide good investment opportunities.

Lagos, with its 20 million population, plans to develop the multi-billion dollar Eko Atlantic City, a Dubai-style gated community that will have skyscrapers, business parks and a marina. This city expects an economic growth of 7% this year. Mckinsey & Company estimates that by 2025, 80 cities in sub-Saharan Africa will have populations of 1 000 000. This accounts for 58% of the area’s growth. These city dwellers will need roads, hospitals, water, and sanitation and will increase the consumer buying power – which will in turn lead to more investment. This mega-city trend will obviously have a huge socio-economic impact. By 2030, cities will be home to 85% of the national population in some countries. This will put a strain on infrastructure – and there will be a host of political issues.

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Wilhelm du Plessis Editor

Investors no longer view the continent as a whole but rather city by city and do their investments accordingly. The major development hotspots for retail, financial services, technology and the construction sectors are Lagos, Nairobi, Accra, Kinshasa and Johannesburg. Sub-Saharan Africa is urbanising faster than any other area in the world. Urban inhabitants have more money to spend which in turn feeds more investment. Investors want to spendmoney where success is proven, growth is strong and will remain sustainably strong. According to a 2015 report by PriceWaterhouseCoopers, Nairobi is the most attractive destination for foreign investment. It is followed by Accra with Lagos and Johannesburg in third place. Despite its large unemployment rate, flailing credit ratings, falling currency and the threat of slipping into recession, South Africa has areas where investment is booming. Sandton, one such area, is exploding with major building and development. In Nairobi, which is said to attract the most foreign investment, the Two Rivers Mall is the largest mall in Africa outside SA with luxury brands already booking space.

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CONSTRUCTION WORLD MARCH 2016