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Tuesday, 19 November 2019

Egypt has the highest number and value of construction projects in Africa: Report

Doaa A.Moneim , Wednesday 28 Aug 2019
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Views: 2779

Egypt topped African countries in the number and value of construction projects in 2018, according to Deloitte’s Africa Construction Trends 2018 report.

The report said the North African countries of Algeria, Egypt, Libya, Morocco, South Sudan, Sudan, Tunisia, and Western Sahara, executed 109 projects at a total value of $148.3 billion. The region accounts for 22.6 percent of projects on the continent and 31.5 percent in terms of US dollar value.

"The number of projects in North Africa increased by 172.5 percent, while the value of projects increased by 92.3 percent. Within the region, Egypt has the most projects with 46 projects, followed by Algeria with 32 projects, and then Morocco with 15 projects," read the report.

It added that the number of African projects qualifying for inclusion increased by 59.1 percent, while the total value of projects increased by 53.3 percent year-over-year.

"For the first time since the inception of this report, 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 percent, worth $148.3 billion. The projects included are spread over 43 of Africa’s 54 countries. Egypt is the single country having the most projects with 46 projects -- 9.5 percent of projects on the continent -- as well as the most projects by value at $79.2 billion, which represents 17 percent of the continent’s value edging out South Africa and Nigeria respectively," continued the report.

The North Africa region witnessed the largest change in the number of projects, with an increase of 69 projects, representing a 172.5 percent increase on last year's count of 40 projects. Furthermore, the total US dollar value of projects in the North Africa region increased by 92.3 percent, and in terms of the total US dollar value of projects in Africa, the Central Africa region witnessed the largest change with an increase of $17.1 billion, 174.5 percent, stated the report.

The greatest number of projects fell into the transport sector, representing 38.6 percent, followed by real estate with 22.8 percent, energy and power with 13.7 percent, and shipping and ports with 7.5 percent, the report added.

It stated that governments continued to be the main owners of projects with 364 projects, 75.5 percent, while the private sector owned 9.3 percent of the projects. Firms headquartered in China represented 3.3 percent, with 16 projects, Australia 2.5 percent, and the Middle East 2.5 percent, each owning 12 projects.

On China's projects in Africa, the report said the infrastructure deficit in Africa and the need to develop infrastructure that provides a functional business environment were well documented. Insufficient clean water, power supply, telecommunication, roads, ports, and railways raise transaction costs and hinder countries from realising their full potential through unlocking value chains in sectors such as agriculture, mining, construction, housing, industry, and manufacturing, as well as fully leveraging their populations.

According to African Development Bank data, Africa’s funding gap is estimated at between $67.6 billion and $107.5 billion per year, with infrastructure needs of between $130 billion and $170 billion annually.

China has participated in over 200 African infrastructure projects. Chinese companies have been working on projects in Africa that will help add and upgrade about 30,000km of highways, 2,000km of railways, 85 million tons per year of port throughput capacity, more than nine million tons per day of clean water treatment capacity, about 20,000 MW of power generation capacity, and more than 30,000km of transmission and transformation lines, according to the report.

"Infrastructure financing provided by China to Africa averaged $11.5 billion between 2012 and 2016, peaking at $20.9 billion in 2015. This included a number of larger transport and energy deals," read the report, adding that China was the most visible single-country funder and builder of infrastructure projects in Africa, financing one in five and constructing one in three projects.

On the finance level, "the findings speak to the attractiveness of Chinese finance in a climate where African countries are looking to alternative sources of development finance, while on the construction side, the findings indicate the global appetite Chinese construction firms have for projects outside of China, as well as the available capacity to undertake them."

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