Construction activity in Sub Saharan Africa to grow over next two years

Mace’s latest cost update for Sub-Saharan Africa reports that construction activity in the region will grow at an average rate of 7% over the next two years.

According to the report, economic growth is set to continue and likely to support construction activity.

However, the increasing domestic political uncertainty and government debt could cause headwinds for public sector investment in major infrastructure projects across Sub-Saharan nations.

As a result, construction companies should be engaged early in the development process, to plan ahead and deliver successful project outcomes.

South Africa faces weak private sector demand and rising construction costs. Construction output is forecast to grow by 0.9% in 2019, with the pace of growth expected to accelerate to 1.6% in 2020.

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.

Kelvin Byres, Director for South and West Africa at Mace, said: 

 “The central outlook for construction activity across SSA is cautiously positive but the overall conceals wide variation between nations. South Africa continues to face significant headwinds but the outlook for East and West Africa is brighter.

“In busier markets like Ethiopia, Rwanda and Ghana, there are big opportunities available for those willing to take risks. Developers should ensure that they are tailoring their procurement strategy to reflect localised capacity constraints. Earlier contractor engagement will also be key in delivering the best project outcomes.”