Posted on :Monday , 14th January 2019
The total number of projects in East Africa has risen by a substantial 96% between 2017 and 2018 with an equally substantial increase of 167% in the total US dollar value of projects, a new report has shown.
The Africa Construction Trends (2018) by consultancy firm Deloitte, reveals that East Africa has a total of 139 projects at a combined value of US$87.1bn. The region accounts for 28.8% of projects on the continent and 18.5% in terms of US dollar value.
This is mostly the result of high-value new projects in the region – such as the Konza Technology Park, and the Bagamoyo Mega Port – both of which are outlined in the top 10 projects below.
According to the report, Kenya has the largest number of projects in East Africa with 41 projects at a value of US$38.2m, followed by Ethiopia with 38 projects at a value of US$19.1m. The total value of projects in Kenya is double the value of projects in Ethiopia.
The Transport sector continues to be the largest sector in East Africa, accounting for 45.3% of all projects in the region and 26.6% in terms of US dollar value. Energy & Power projects account for a significantly lower share of projects at 18.0% in the region and 21.1% in value terms.
The focus on these two sectors reflects the fact that a well-developed transport network as well as reliable energy supply and access are integral to the East African Community’s (EAC) Development Strategy.
Completion of Kenya’s US$3.2bn NairobiMombasa rail line – built and funded by Chinese construction companies and financiers respectively – marks the completion of the first phase of the intraregional railway line that will eventually extend to Uganda, Rwanda, South Sudan, and Ethiopia, effectively placing Kenya at the centre of East Africa’s rail ecosystem.
Regional projects such as these demonstrate a shift towards tradeenabling infrastructure that aims to spur intra-Africa trade and integration.
Furthermore, alignment through regional projects allows African economies – particularly smaller economies – to participate in collective bargaining, making it easier for them to secure funding for infrastructure projects. Shipping & Ports accounts for 6.5% of all projects in the region and 21.4% in terms of US dollar value.
One such port project – the Bagamoyo Mega Port in Tanzania – is the second largest project in East Africa in US dollar terms with a total value of US$11bn, demonstrating the significant level of investment intrinsic to port projects.
The Africa Construction Trends (2018) also notes that while majority of projects in East Africa are government-owned (84.2%), China continues to play a significant role when it comes to funding the projects in the region.