There are very strong indications that construction activities in sub-Saharan Africa will grow over the next two years, despite various risk factors that threaten to limit economic growth according to Mace International Consultancy and Construction Company.
Mace says that the overall outlook for construction activity in sub-Saharan Africa is reasonably strong, with an average 6 percent a year growth forecast over the next two years, but warns that there is notable variation across the region.
This variation, driven in part by complex political and economic challenges in each nation, creates an element of uncertainty that could potentially destabilise markets and restrict growth.
This is particularly possible in countries with high levels of foreign denominated debt.
Nonetheless, ambitious and large-scale social infrastructure programmes are expected to support further growth, with housing and energy sectors set to attract significant funding across the entire region.
Ethiopia is leading in this regard, with construction activity forecast to achieve double-digit growth through to 2020.
The cautiously optimistic outlook for construction demand across sub-Saharan Africa comes at a time when the costs of construction materials are rising and contractor capacity is already stretched.
“Together, these factors suggest that upward pressure on construction costs in the region will continue over the medium term, which will create a challenging procurement environment,” says Kenya-based MaceYMR MD Simon Herd.
The firm expects that better economic prospects will hopefully drive a recovery in the construction sector in the second half of the year, following the election-induced hiatus in public sector investment in a number of African countries.
MIKE OCHONMA
