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Governments largest developers of Africa’s infrastructure projects

29th November 2017

By: Creamer Media Reporter

     

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Governments remain the single largest developers of infrastructure projects – and own between 57% and 90% of tracked projects – across Africa, the 2017 edition of Deloitte’s ‘Africa Construction Trends’ report has found.

The report, released on Wednesday, includes 303 infrastructure projects valued at $50-million or above, that have broken ground on the continent since June 1. 

In total, these projects are worth $307-billion.

“Governments that invest in enabling infrastructure are seen as more proactive and tend to attract more investors, ultimately making them more likely to achieve economic and export diversification objectives,” said Deloitte Africa infrastructure and capital projects leader JP Labuschagne.

However, only seven of Africa’s top 20 projects under construction are likely to be completed on time. 

Globally, nine out of ten megaprojects, defined as having a value over $1-billion, run either over budget or over time, with emerging markets, marred by weaker governance institutions, leaning towards significant time and cost overruns.

“Government-owned projects are the worst offenders, with 83.3% of projects delayed. Three-quarters of privately owned projects are on time. This shows a consistent pattern of overruns compared with global projects,” he explained.

The report also showed that Southern Africa was home to the largest number of projects, at 93, while West Africa remained the region with the largest share of projects in terms of value, worth $98.3-billion.

South Africa has the most projects, at 44, while Nigeria tops the list in terms of project value, at $69.1-billion.

The report further highlighted the low levels of large-scale investment into social development projects, with only 1.2% of total investment going to the water sector and less into education.

“Between 2016 and 2017, there were two fewer energy and power projects in Africa and three fewer healthcare projects,” Labuschagne said.

The transport sector accounted for more than half of the projects this year.

“It would be prudent for governments across Africa to increase investor confidence by committing to more large-scale development projects,” Labuschagne concluded.

Edited by Creamer Media Reporter

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