Market Trends of Africa Construction Industry
Infrastructure Construction Projects Driving the Market
African cities are changing with several significant projects, ranging from magnificent skyscrapers to megacities built from scratch. These multimillion-dollar construction projects in Africa are giving its cities a much-needed transformation.
Developing infrastructure has been a focus of many governments to meet the needs and requirements of a growing population, making construction the largest sector in Africa. There are over 570 construction projects in Africa worth USD 450 billion. The energy sector has projects worth over USD 370 billion, followed by the transportation sector, with projects that include roads, airports, and railways worth USD 280 billion.
Egypt leads the African market with over 300 active projects worth USD 338 billion. With active projects worth around USD 207 billion, South Africa comes second, followed by Nigeria, which has ongoing and upcoming projects worth USD 200 billion.
Nigerian refineries are dismal, leaving one of Africa's biggest crude oil producers dependent on petroleum imports. However, Dangote is changing that narrative with an indigenous refinery capable of processing 650,000 barrels daily, making it the largest single-train refinery in the world. The refinery spans 2,635 hectares in the Lekki Free Trade Zone, Lekki, Lagos State. It is said to cost more than USD 12 billion.
Konza Technopolis is Kenya's smart city project, a few kilometers from Nairobi. The Kenyan government has allocated 2,000 hectares of land for the project. The city is part of the government's vision for 2030 and may serve as the central hub for technology, science, telecom, and education. The estimated cost of this smart city is USD 14.5 billion, and it may generate about 20,000 jobs when completed. The first phase of the project's horizontal infrastructure works was wrapped up in 2022.
Northern Africa Dominating the Market
North African countries such as Egypt and Morocco have seen significant construction growth driven by large-scale infrastructure projects, tourism development, and urbanization.
The Egyptian government has made significant investments in the building industry. Additionally, the government is modernizing transportation systems, ports, and airports. The Ministry of Transportation is currently working on about 25 projects related to the railroad industry. The development of roads and providing enough transit between cities are the government's primary priorities.
Egypt has revealed plans to build a high-speed train connecting the entire nation. As the prime contractor, Siemens was given a contract for this project worth USD 8.7 billion. According to the country's plans, up to 14 new smart towns could be built in Egypt. The Ministry of Housing claims that in less than two years, Egypt finished infrastructure projects valued at about EGP 1.7 trillion (about USD 106.25 billion).
The New Urban Communities Authority (NUCA) intends to construct more cities with integrated educational, medical, retail, and leisure services. This organization is in charge of creating these new cities and tying them to existing infrastructure.
Morocco's National Investment Committee approved 17 projects with a total budget of MAD 76.7 billion (USD 7.4 billion) in May 2023. In January 2023, the Moroccan government approved 26 projects with an investment of MAD 28.5 billion (USD 2.7 billion) for five years.
According to Morocco's Energy Transition and Sustainable Development Ministry, in July 2023, the Kingdom of Morocco was to allocate MAD 55 billion (USD 5.3 billion) during the next four years with a view to improving its national economy through cost-effectiveness and clean energy until 2027.
