Deloitte this week released, the Africa Construction Report for 2017, an annual publication detailing the African construction market. Last year, the number of projects qualifying for inclusion in the report increased by 5.9%. However, the total value of projects shrunk by 5.2% year-on-year over.
Southern Africa had the largest number of projects according to the report with a total of 93 projects, 44 of those being in South Africa while West Africa remained the region with the largest number of projects in terms of value, worth US$98.3bn. Of these, Nigeria received the better part of the financial mass of projects; US$69.1bn by project value.
The report includes an analysis of 38 projects from 54 African countries. A majority of the projects undertaken had a value between US$50m-US$500m, making up 63.7% of all the projects. The percentage of large projects with a value of US$10bn and over was just 1.7% constituting five of the total projects while only 2.6% representing eight of the projects had a value range of between US$5.1bn-US$10bn. In total, 66 projects or one in five projects were valued at over US$1 bn.
Regionally, the bulk of the projects went to Southern Africa with 30.7% of the projects valued at US$89.7bn followed by West Africa with 26.1% of the projects worth US$98.3bn. East Africa gathered 23.4% of the projects with a value of US$32.6bn while North Africa accounted for 13.2% of the projects making up US$77.1bn. Central Africa undertook the least number of projects with a total of US$9.8bn.
It is interesting to note the significance of project quality over project quantity going by the relatively high value of projects in Northern Africa and Western Africa in comparison to other regions which had higher number of projects.
Last year, East Africa saw a significant appreciation in the number of projects which went up by 65.1%. The value of projects also increased by 18.8%, meaning that the region undertook a number of projects of lower value. Central African region received projects with the greatest value, an increase of 34.9% from the previous year.
In summary, North Africa, Central Africa and West Africa all saw a decrease in the number of projects included in this year’s report while only Southern Africa and West Africa saw a decrease in the total value of projects. Collectively, the projects had a total value of US$307bn, a slight drop compared to US$324, which was the total value of projects undertaken in 2016 and even much less than the US$375bn in 2015.
This value paradox occurred despite the fact that the total number of projects rose from 286 in 2016 to 303 in 2017. Perhaps this is a reflection of the slowed growth in Sub-Saharan economies last year, which aggregated at of 2.6%.