East Africa Rising: Construction Opportunities

Posted on : Wednesday , 3rd February 2016

As the international construction market becomes more globalised and competition for untapped markets increase, Africa especially East Africa has seen extensive influx of foreign capital. Increasingly firms are taking advantage of the lucrative potential of a continent that is still largely lacking access to basic infrastructure, to build adequate transport networks, water supply, functional power grids and formal housing for its growing population. A recent report by Deloitte remarked that “in a short space of time, [Africa] suddenly resembles a massive construction site” and according to KPMG’s Global Construction Survey, over 50 per cent of senior leaders in the industry see the continent as one of the most popular prospects for corporate expansion. Three key engineering segments are seen as most lucrative for investment: transport, water supply, and power.

Forward thinking international construction and engineering firms will find the influx of capital for infrastructure projects of great interest. Particularly in countries like Tanzania, where the industrial sector is expected to be the key driver behind economic growth through development in the mining and manufacturing sub-sectors. This makes not just Tanzania, but all of East Africa a hotbed of opportunity. There is a need for international building expertise, which the international construction industry can supply. At Spencon, we’ve been working with international firms and development agencies to deliver regional infrastructure projects in East Africa for over 35 years.

Against this backdrop, African governments have made infrastructure spending a priority, following Tanzania’s example. In the financial year 2013/2014, Tanzania’s government increased spending on infrastructure to 2,16trn Tanzanian shillings (US$ 9,96bn), up from 1,94trn (US$ 8,95bn). This is not a phenomenon that is restricted to Tanzania. In 2014 alone, over US$ 4bn was raised by private equity funds for infrastructure investment in Africa. This has acted as an incentive for continued investment inflows in the construction industry and underscored the opportunities for international companies in Africa and East Africa.

Source : constructionreviewonline.com

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