Page 8 - AfrElec Week 30 2022

AfrElec POLICY AfrElec

African construction industry

challenged by rising costs,

renewables offer opportunities

AFRICA RENEWABLE energy and the easing of some contracts in which the client sources and issues
inflation drivers, such as fuel costs, may help material, the survey showed.
Africa’s construction sector recover in an other- The firm predicts 2022 is going to be diffi-
wise difficult year ahead, U.K.-based Turner & cult year, but the easing of drivers of inflation,
Townsend says in its International Construction including costs for fuel, transport, imports, steel,
Market Survey (ICMS) for 2022. raw materials costs and costs of imported goods,
There has been a significant recovery in could assist African economies in resuming
major cities across Africa, including Johannes- their economic recovery.
burg, Cape Town, Gaborone, Harare, Nairobi, Also, residential and social housing remains
Kigali, Kampala and Lagos, but a full recovery strong across Africa’s construction sector, with
in construction requires gross domestic product industrial, manufacturing and logistical sectors
(GDP) growth to be restored to pre-pandemic seeing some of their strongest rates of growth.
levels, according to Turner & Townsend. Warehousing and goods movement have been
While most markets have partly recovered boosted by the rapid growth of e-commerce
from the COVID-19 pandemic, Russia’s inva- sites in Africa, and the rise of remote working
sion of Ukraine and renewed lockdowns in has seen a growing requirement for data centres
China are starting to weigh on the construction in most regions.
sector, it said. A major factor is construction Growth in renewable energy in Africa pre-
costs driven higher by supply-chain bottlenecks sents many opportunities for the building
caused by the pandemic and the war in Ukraine, industry, the company said the firm. There are
with rising energy prices. many regions in Africa where people lack access
“Inflation across the continent (Africa) to electricity, while decentralized renewables
will likely reduce consumer demand, further offer opportunity to provide cheap local power.
impacting growth throughout 2022,” said “A switch to renewables would also do away
Turner & Townsend. with reliance on imported fossil fuels for many
Rising prices and supply shortages have nations while offering energy security going for-
resulted in higher risk for contractors, and ward,” said Turner & Townsend.
building schedules for projects increased due to The ICMS survey draws from data from 90
material supply shortages. Project teams have global markets, and explores the challenges and
been forced to take measures, including early opportunities presented by economic condi-
procurement, early payment to contractors, or tions that affect the construction industry.™

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