Slide of the month (SOTM) May. Construction projects in Africa

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Africa’s booming population creates vast opportunities, including significant demand for robust infrastructure. Some of the key drivers of this growth are economic growth, urbanization, industrialization, and the growth of the middle class. African governments have prioritized the improvement and diversification of infrastructure and construction projects.

We researched on the regional construction industry in Africa for one of our clients in the sector.

The East African region accounts for 40.3% of projects across the continent and 29.5% of the value. West Africa accounts for 16.6% of all projects in Africa. South Africa increased its infrastructure project activities in 2020 and accounted for 26.5% of projects across Africa. North Africa accounts for 19.2% of projects in Africa and 29.1% in terms of US dollar value. Central Africa represents 3.5% of all projects in Africa.

We consolidated all the findings into a comprehensive report which also contained tactical recommendations for the client.

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) April. Demand for heavy machinery in Africa

Slide of the month (SOTM) March. Tanzania medical technology value chain

Slide of the month (SOTM) February. Vehicles in operation in East African countries

Slide of the month (SOTM) January. Estimated number of converters in select countries in Africa

Slide of the month (SOTM) December. The dairy industry in Ghana

 

 

Slide of the month (SOTM) November. The construction industry in Africa

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Construction projects on the African continent are not only getting bigger, but more complex in nature. Some of the key drivers are economic growth, urbanization, industrialization, and the growth of the middle class. The transport sector continues to take the biggest share of the total construction projects in the continent, followed by real estate. In a bid to identifying suitable business partners in selected countries in Africa, we recently completed a local research project in the construction industry. This prompted us to do a deep dive and provide a detailed market outlook. After sharing our findings and giving strategic recommendations, we were in a position to prioritize different countries and sectors.

If you have any questions or concerns, you can contact us at info@africon.de

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) October. The meat & fish sector in Nigeria

Slide of the month (SOTM) September. The soft drinks market in Kenya

Slide of the month (SOTM) August. Steel demand in Africa

Slide of the month (SOTM) July. The future of Africa’s independent automotive aftermarkets

Slide of the month (SOTM) June. Consumer goods across Africa

 

Slide of the month (SOTM) August. Steel demand in Africa

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The demand for steel in Africa has been growing due to various drivers. africon has over the years conducted more than 200 interviews with decision makers and key industry experts from the continent for our clients. Through one recent research for a machinery supplier, we were able to highlight increased government spending, growing investments in electrification projects and urbanization as some of the key drivers of steel demand. We were also able to show the demand per selected country. Through our extensive knowledge and contacts, we are continuing to help reduce cost, risk and time for our clients in the sector.

If you have any questions or concerns on steel demand in Africa, you can contact us at info@africon.de

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) July. The future of Africa’s independent automotive aftermarkets

Slide of the month (SOTM) June. Consumer goods across Africa

Slide of the month (SOTM) May. Glass production in Africa

Slide of the month (SOTM) April. The sugar industry in East Africa

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

 

Slide of the month (SOTM) May. Glass production in Africa

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Glass has innumerable applications like building, construction and packaging among others. africon did an analysis for a chemicals manufacturer to understand glass production in Africa, by looking at 5 major countries involved in the process. These were Kenya, Nigeria, Tunisia, Egypt and Morocco. Egypt clearly emerged as the leading country in glass manufacturing, followed by Morocco and Tunisia. Based on the findings, africon was able to have a scope on glass production as an application industry for our client and give strategic recommendations.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) April. The sugar industry in East Africa

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) December. Automotive market in Uganda

 

Slide of the month (SOTM) March. The rope manufacturing industry in Africa

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africon recently completed stage 1 of a project for a client from the textile industry. As a supplier of machines for making ropes, the first key question on the way to developing an Africa strategy was “where can we find local manufacturing of ropes in Africa?”. africon answered this question through a combination of industry knowledge from an expert on the ground, as well as a comprehensive analysis of trade statistics. With the identified focus countries, the project can now proceed to look at specific market environments and how our client can position himself to succeed in them.

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Slide of the month (SOTM) January. Internet speeds across Africa

Slide of the month (SOTM) December. Automotive market in Uganda

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Slide of the month (SOTM) October. Construction sector performance in South Africa

Slide of the month (SOTM) October. Construction sector performance in South Africa

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South Africa’s construction sector is one of the largest in Africa and currently worth about 15 billion USD while contributing 4% to the country’s GDP. Unfortunately, it has been in recession since 2017. The overall growth rate in the past decade has been relatively low at only 2.47%.

A struggling economy and a 12% reduction in spending on infrastructure by the government have negatively affected the sector, and even in the current year 2019, some players report that business is shrinking further.

africon completed a local research project in this sector, which was aimed at achieving a detailled market understanding as well as identifying suitable business partners in South Africa for our client.

Despite the current situation, a short to medium term upturn is likely as there are still many planned projects. Additionally, the government has recently established a 27.5 billion USD infrastructure fund and targets infrastructure spending of 59 billion USD over the next 3 years.

Slide of the month (SOTM) August. Real estate projects in South Africa

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The real estate industry in South Africa has been growing steadily in the last few years. Looking at the industry’s three main segments, i.e. residential, commercial, and additions/alterations, it is apparent that South Africa´s residential developments have increased the most in value, at a growth rate of 11.37% between 2015 and 2018. Similarly, additions and alterations have increased at a growth rate of 7.92% in the same period. The growth in these two segments can be accredited to the country’s growing urban population.

Although commercial projects are the second largest in South Africa’s real estate industry, there has been a decline between 2017 and 2018. Commercial projects increased in value from 1.15 billion USD in 2015 to 1.8 billion USD in 2017 and declined to 1.3 billion USD in the year 2018, making this the slowest growing segment in the last few years. The main reason for this decline is the current economic performance of the country which is currently quite low after recovering from a recession in the year 2017.

For more questions and comments, do not hesitate to contact us.

Slide of the month (SOTM) April. Ghana’s aluminium fabrication market

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The overall market for aluminium profiles in Ghana is split into three price/quality segments: Firstly, premium profiles are used in large high rise and complex construction projects, which are shaping the skylines of Accra and other cities in Ghana. This segment represents around 19% of the total market volume and is served by so called “International Fabricators” and “Niche Fabricators”. On the opposite side of the spectrum, “Retail Fabricators” serve around 50% of the market demand with relatively lower price/quality profiles. These profiles are used in common housing construction and for smaller commercial buildings. In between these two segments is the medium price/quality segment, which represents around 31% of the market. Profiles in this segment are used in a variety of residential and commercial construction projects.

Overall, the aluminium profiles market in Ghana has a pyramid shape, with a large budget and a relatively smaller but still significant premium segment. As for other building materials, especially the premium segment holds interesting opportunities for firms from Europe and elsewhere.

If you would like to know more about how your market in Ghana looks, how to access this market, who the right local partners and the customers are, do not hesitate to get in touch.

Slide of the month (SOTM) March. Kenya’s construction and real estate sector

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africon GmbH was contracted by one of our clients and we successfully conducted a research on the aluminium industry in Kenya. We found out that the key drivers of this industry are the construction and real estate sectors in Kenya. Findings revealed that these sectors have experienced positive growth rates within the last five years and are expected to expand even further.

Kenya’s construction sector expanded by 8.6% and contributed approximately 6% to the country’s GDP in 2017. It is also one of the major sectors attracting foreign investors to the country. 

According to Deloitte’s construction trends report, Kenya has remained the leading country with the highest number of projects in East Africa for four consecutive years, with projects increasing by 78% from 23 projects in 2017 to 41 projects worth $38.2 billion in 2018. The major construction projects are in real estate, energy and power, and transport, sources also reveal that the Kenyan government is spending billions of dollars on transport projects as Kenya is expected to become the logistics hub of East Africa.

Challenges to this Kenya’s construction sector include: the frequent use of substandard materials, long procurement procedures, low project completion rates, and low technological knowledge. Despite these apparent challenges, continuous growth is expected in the sector as the Kenyan government plans to build 500,000 houses by 2022, and also to reduce corporate tax for developers who construct at least 400 units per year.

Kenya’s real estate sector is the 6th largest contributor to Kenya’s GDP, and was valued at $5.5 billion in 2017. The sector expanded by 6.1% in 2017 compared to 8.8% in 2016, and this slowed growth rate is due to the elections and reduced credit supply (as a result of capped interest rates). The construction of new private residential buildings in Nairobi increased from 9,054 in 2015 to 10,002 in 2016, while new public residential buildings rose from 45 in 2015 to 1,062 in 2016. Some of the challenges faced by Kenya’s real estate sector include inadequate sources of funding, high land costs, and infrastructure development costs. However, government initiatives such as digitization of the land ministry, removal of land search fees, and inclusion of affordable housing as part of Kenya’s big four agenda is likely to boost real estate development over the next few years

For more information, check out our other slides of the month and do not hesitate to contact us.

 

SOTM December

Slide of the month (SOTM) December. Aluminium market growth in sub-Saharan Africa

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SOTM December

The Aluminium market in sub-Saharan Africa has been experiencing a steady growth in the past decade.

The major contribution to this, is the increased import of hollow profiles of aluminium alloys into sub-Saharan Africa which has grown by 467%, from 23 million tonnes to 107 million tonnes between 2008 and 2017, compared to other profiles.

The non-alloyed profiles which has the lowest contribution seems to be dwindling in import size, as they only increased between 2009 and 2012, after which they began to decline.