Kenya recorded the lowest capital expenditure on fixed assets like roads and other infrastructure, among five East African Countries in the region.
Data from the latest edition of Africa Construction Trends report shows that the country recorded Gross Fixed Capital Formation (GFCF) of 20 percent of GDP between 2011 and 2017. This was lower than the region’s average of about 22 percent.
GFCF is an estimate of net capital expenditure by both the public and private sectors. The measure shows the share of economic value add that is invested rather than consumed.
Ethiopia recorded the highest level of investment during the period sustaining its GFCF as a share of GDP spending above 35 percent for most of the period. This was followed by Tanzania and Uganda respectively.
The high growth figures for Ethiopia have been driven in a large part by the construction sub-sector which expanded by 16 percent in 2018 and is also the largest industrial sub-sector in the country accounting for 71.4 percent of the industries sector.
“Based on the country’s robust infrastructural projects pipeline, the construction industry is projected to grow further in the medium term, with Ethiopia’s forecast to become the fastest-growing construction market in SSA,” says the report.
Data show that 53 percent of roads on the continent remain unpaved and 47% of countries have electricity coverage below the world average of 82 percent.
Several African countries are expected to increase their infrastructure investment spending in the near future. Economic growth in East Africa is expected to moderate from 6.7% in 2018 to 6.4% in 2020 according to the report.