The Africa construction market is expected to register a CAGR of 6.4% from 2019-2024. This is according to Reportlinker’s “Africa Construction Market – Growth, Trends, and Forecast (2020 – 2025)” report.
The report explains that the growth will be attributed by advantages such as availability of huge natural resources, huge investment opportunities in energy and infrastructure, cheap labor and a fast-growing consumer market. Also, there is a beneficial business environment that includes favorable economic development policies and rising commodity prices in addition to continued progress in the fight against corruption and the adoption of democratic governments.
As a region, East Africa has the largest number of recorded projects with 139 projects. North Africa accounts for the largest share of projects in terms of value at 31.5%. Egypt is the single country having the most projects with 46 projects as well as the most projects by value at US$79.2bn, edging out South Africa and Nigeria respectively.
High growth rate potential
As a sector, the Transport sector has 186 projects 22.7% of total project value, following by power and energy projects with a share of 24.4 of the total project value. According to the report, South Africa’s construction industry continues to face tough times amid lower investment in infrastructure by government, low business confidence and lower foreign direct investment.
Kenya’s construction industry on its part has a high growth rate potential. This is in line with the national long-term development policy The Kenya Vision 2030. The national policy aims to transform Kenya into a newly industrializing, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment.
Kenya Vision 2030 overall goal for the construction sector is to increase its contribution to GDP by at least 10% per annum and propel Kenya towards becoming Africa’s industrial hub. This is supported by investments in public infrastructure, residential and renewable energy projects.
Government flagship programmes such as Tunisia 2020, the five-year development plan, and Renewable Energy Action Plan 2030 is expected to drive the industry’s growth over the forecasted period. Under the Tunisia 2020 national five-year development plan, the government plans to develop several large scale projects in the transport, tourism, energy and utilities, education, healthcare, communication, industrial and housing sectors until 2020. The programme involves a total budget of US $60.bn, of which US $25bn will be provided by the government.