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CONSTRUCTION WORLD
MAY
2015
To qualify for inclusion in the Deloitte African Construction Trends
report, projects must be valued at more than USD50-million and
had to have broken ground by at least 1 June 2014. While the
number of projects that qualified for inclusion in the 2014 report fell to 257
from 322 the year before, the total value of projects under construction
increased from USD222-billion in 2013.
“Africa’s rapidly growing middle-class continues to drive demand for
sustainable social infrastructure,” said Andre Pottas, regional director at
Deloitte. “Africa is en route to a brighter future and overall we see the
opportunities surpassing the challenges facing our continent.”
Of the projects included in the 2014 Deloitte African Construction
Trends report, no less than 143 were led by the public sector with a
further 88 being private sector initiatives and 26 classified as public private
partnerships (PPPs). Energy & Power accounted for 37% of the number of
mega projects undertaken in Africa in 2014, followed by transport (34%),
mining (9%), real estate (6%), water (5%), oil & gas (4%), mixed use facilities
(2%) and health care (1%).
“More than 10% of the projects included in this year’s survey were
structured as PPPs, which is an increase from about 4% the previous
year,” said Pottas. “That is very encouraging to see as we believe that
significant private sector participation is required alongside government
initiatives in order to enable Africa to close its infrastructure gap with the
rest of the world.”
Southern Africa led construction activity on the continent, accounting
for USD144-billion in projects or 44,5% of the total value of mega
construction projects on the continent last year. West Africa overtook
East Africa with the region attracting USD74-billion in projects, or 23% of
the total projects on the continent by value. Central Africa experienced a
massive 117% surge in the value of construction projects which reached
USD33-billion while North Africa saw the value of construction projects
jump almost 36% to USD9-billion. East Africa experienced a moderate 10%
decline in the value of projects, which nevertheless totalled a respectable
USD60-billion in 2014.
“Africa continues to be a magnet for Foreign Direct Investment (FDI)
and intra-African capital inflows,” said Pottas.“With a 76% completion rate
of projects collected from our previous report, expectations remain high
for infrastructure to provide the developing continent with much needed
market expansion.”
Africa’s infrastructural transformation is being driven by increased
output in the natural resources sector, which in turn has underpinned rising
fiscal expenditure on infrastructure projects to facilitate rising international
trade with the continent. At the same time, rapidly growing urbanisation
and rising domestic demand in Africa has ushered in an unprecedented
wave of foreign direct investment in the continent’s biggest and most
dynamic economies.
“The African Construction Trends report confirms continued, intensive
construction activity across the continent,” said Pottas. “The journey may
not be high speed just yet but it is unfolding at a steadily increasing pace.”
MARKETPLACE
>
MEGA PROJECTS SURGE
Investment in Africanmega projects surged 46% to
USD326-billion last year led by heavy investment
in transport, energy and power, according to
the third annual Deloitte African Construction
Trends report, whichmonitors progress on capital
intensive infrastructure on the continent.
Akosombo Hydroelectric Power Station on the Volta River supplies
energy to almost the whole of Ghana and half of Togo, West Africa.