Page 21 - EXPORT GUIDE 2 AFRICA

Building & Construction
IN AFRICA

Countries with While the construction industry is currently 3) the Durban waste-to-energy project will
transform land ll gas into electricity for up
in a better position compared to ve years
Signi cant Construction ago, contractors have had to balance short to 6,000 low-income households; and 4) the
. Angola and long term demands and dynamics – 425-bed Queen Mamohato Memorial
including uncertainties over where the
Hospital in Lesotho will become the
. Ethiopia global economy will be in ve years from country’s main public hospital. All of these
. Ghana now. (After all, ve years ago, the global projects have a signi cant value component
. Kenya economy was, at the time, expected to be in for average citizens.
. Lesotho a much rosier scenario during 2014 than
. Mozambique what presently is the case.) The KPMG From a regional perspective, mining
. Nigeria Global Construction Survey 2017 found construction projects remain important for
. Tanzania respondents making recommendations for West, Central and Southern Africa, while in
. Uganda construction companies to position them- North and East Africa, spending on
. Zambia selves for the future, and this also has a transport and energy is more dominant. Of
particular bearing on African operations: course, projects in the areas of energy/pow-
The AECOM Africa Property and er, transport, water and real estate could be
Construction Handbook 2013 provides • Investing in people via the recruitment of seen as providing either industrial or house-
estimates for the construction of residential, personnel with su cient skills and knowl- hold bene t, or both. The key issue is that
commercial, retail and industrial buildings edge within a speci c sector; Africa’s infrastructure development is no
in 27 world cities, of which 12 are located in • Enhancing management of mega projects longer dependent on or dominated by
Africa. Governments are increasingly with the right people in the right location; resources. This can be explained by the
turning to Public-Private Partnerships (PPPs) • Creating a true risk management culture rapid expansion of non-resource GDP across
to reduce nancial costs and shorten by communicating and monitoring these the continent in recent years, which has
delivery times of infrastructure projects. The practices; fuelled the rise of the African consumer.
involvement and abilities of private partners • Standardisation of practices across diverse With consumer-oriented markets seen as
often make it easier to attract o shore projects; and the continent’s largest business opportuni-
funding for local capital projects. For this • Becoming a strategic partner to clients’ ty, African governments and other
reason, PPPs can be found in far-reaching businesses by working more closely with infrastructure investors are adapting.
sectors and geographies. The presence of these partners.
private organisations can also open the Energy and power projects are the largest
window to other potential investors by A well-worn argument postulates that focus of construction in North Africa, with a
setting a successful example for those who infrastructure spending in Africa is focussed signi cant presence by European and
are not well versed in Africa’s investment on resources due to many countries remain- Chinese contractors.
landscape. ing very dependent on the export of miner-
als and hydrocarbons. But this is no longer These types of developments require an
Private investment funds focussed on the case. GDP per capita levels in many ultra-longterm view on a country’s future,
Africa have now been set up in most of the African countries have climbed past the and the current social and political unrest is
world’s nancial centres. These are often critical US$1,000 level – enabling consum- not impacting the implementation much. A
associated with established investment ers to purchase more than just the basics. key reason for this is the source of funding:
companies. Private investors as well as Urbanisation has also been an important nearly 60% of the nancing for major
pension and insurance funds are able to buy factor to contend with: Africa had 22 cities construction projects in the region are
into these funds just like they would invest with more than two million people during coming from domestic sources or develop-
in equity or bond products, but with the 2015 and will have another 14 of this size by ment nance institutions on the continent.
knowledge that their money will be used on 2020, according to the United Nations. These entities would be much more tolerant
the African continent. So infrastructure spending can no longer be of the risks currently seen in the region
just xated only on export-oriented activi- compared to investors from developed
Multilateral organisations the world over ties. Africans are demanding more from economies. In contrast, Southern Africa is
have, for a long time, been involved in their governments in terms of infrastruc- the region with the lowest average political
expanding Africa’s infrastructure. The ture. Indeed, the KPMG Infrastructure 100 – risk levels, and it remains the gateway into
African Development Bank (AfDB) is the a report showcasing 100 “of the most the continent. Putting aside the massive
largest lender on the continent, with 60% of innovative and inspiring urban infrastruc- transport and energy projects underway in
its loan book dedicated to infrastructure. ture projects from around the world” includ- South Africa, the region has many large real
The World Bank has been heavily involved in ed several African projects that all fall estate projects focussed on retail shopping
transport and public utilities (electricity, outside the resource sphere: 1) the Ethiopia centres and mixed-use developments
water and sanitation) development. The big Djibouti railway will reduce the cost of combining residential, o ce and retail.
advantage for governments is that imported goods for Djibouti; 2) the Blue Many countries in the region still lack a
multilateral money is most often o ered at Line of the Lagos Rail network will transport developed formal retail industry and are
concessionary lending rates that are much 40,000 commuters to and from work on a bene tting from retailers based in South
lower than commercial borrowing costs. daily basis; Africa expending north of the border.