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Deloitte on Africa

African Construction Trends Report 2013

The infrastructure development boom across Africa has attracted investments totaling US$ 222.7 billion spend on a total of 322 projects. In this second African Construction Trends Report, the focus was on continental construction trends for projects valued at more than US$ 50 million on which construction began, but was not completed, before 1 June 2013. The top sectors, rated by investment value, are energy and power (36%), transport (25%), mining, real estate and water, followed by oil and gas.

Africa, and indeed the world, is hard at work building, modernising and strengthening the African infrastructure inventory, which will lead to greater African self-sufficiency and global competitiveness.

New energy generation hubs are being forged, transport and logistics corridors are being built and basic social infrastructure is being invested in. Telecommunications connections are being strengthened and development is now starting to touch the commercial property sector on the continent.

Overall, 56% of projects are owned by governments; 4% are Public Private Partnerships (PPPs). Private investors own 39% of the projects, with European and US investors owning 17%. Ownership by BRIC countries (excluding South Africa) is currently limited and Eastern and intra-African investors hold just 2%,

Statistics for project debt funding across the continent reveal that 36% of funds are provided by Development Finance Institutions (‘DFIs’). International DFIs account for 16% and Africa DFIs, 13%. About 7% of surveyed projects are co-funded by International and Africa DFIs.

Other major sources of finance are:

  • Domestic governments
  • Europe/US based stakeholders
  • Chinese stakeholders
  • Private domestic investors
  • Foreign institutional investors

When it comes to construction:

  • European or US contractors are building 37% of projects
  • Chinese construction corporations are building 12%
  • The balance of contracts are held by private domestic companies and contractors from Japan, South Korea, Brazil and Australia.

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