SUB-SAHARAN AFRICAN CONSTRUCTION ACTIVITY SET TO PICK UP DESPITE RISKS

International consultancy and construction company Mace expects construction activity in sub-Saharan Africa to grow over the next
two years, despite various risk factors that threaten to limit economic growth.

Mace says that the overall outlook for construction activity in sub-Saharan Africa is reasonably strong,
with an average 6% a year growth forecast over the next two years, but warns
that there is notable variation across the region.

This variation, driven in part by complex political and economic
challenges in each nation, creates an element of uncertainty that could
potentially destabilise markets and restrict growth.

This is particularly possible in countries with high levels of foreign
denominated debt.

Nonetheless, ambitious and large-scale social infrastructure programmes are expected to
support further growth, with housing and energy sectors set to attract
significant funding across the entire region.

Ethiopia is leading in this
regard, with construction activity forecast to
achieve double-digit growth through to 2020.

Mace forecasts that construction activity in Kenya, Rwanda, Tanzania and Uganda will also grow over the
medium-term.

“The cautiously optimistic outlook for construction demand across sub-Saharan Africa comes at a time when the
costs of construction materials are rising
and contractor capacity is already
stretched.

“Together, these factors suggest that upward pressure on construction costs in the region
will continue over the medium term, which will create a challenging
procurement environment,” says Kenya-based Mace YMR MD Simo Herd.

In South Africa specifically, better
economic prospects will hopefully drive a recovery in the construction sector in the second
half of the year, following the election-induced hiatus in public sector
investment.

President Cyril Ramaphosa’s stimulus package, unveiled in September last year, includes $30-billion to start a new infrastructure investment fund and should boost construction activity over the medium term, states Mace. https://www.engineeringnews.co.za/article/sub-saharan-african-construction-activity-set-to-pick-up-despite-risks-2019-05-07