Construction activity in sub-Saharan Africa will grow at an average rate of 7% in the next two years, international consultancy and construction company Mace’s latest cost update for the region indicates.
According to the report, continued economic growth is likely set to support construction activity.
However, increasing domestic political uncertainty and government debt could cause headwinds for public sector investment in major infrastructure projects across sub-Saharan African countries.
As a result, construction companies should be engaged early in the development process, to plan ahead and deliver successful project outcomes, Mace notes.
South Africa faces weak private sector demand and rising construction costs. Construction output is forecast to have grown by 0.9% in 2019, with the pace of growth expected to accelerate to 1.6% this year.
Construction activity in Ethiopia and Ghana should benefit in the next two years from commitments to strategic infrastructure delivery.
On the other hand, while Tanzania is projected to top the growth league table over the next few years as transport and power projects progress, political uncertainty could constrain the near-term outlook.
“The central outlook for construction activity across [the region] is cautiously positive but the overall projection conceals wide variation between nations. South Africa continues to face significant headwinds but the outlook for East and West Africa is brighter,” comments Mace South and West Africa director Kelvin Byres.
“In busier markets like Ethiopia, Rwanda and Ghana, there are big opportunities available for those willing to take risks. Developers should ensure they are tailoring their procurement strategy to reflect localised capacity constraints. Earlier contractor engagement will also be key in delivering the best project outcomes,” he suggests.