Foreign direct investment boosts African megaprojects
Investment in African megaprojects was up 46% to $326-billion (R3.95-trillion) last year, led by increases in investment in energy and power, according to Deloitte’s latest African construction report.
To be included in the report, the project’s value had to be more than $50-million and to have started by June 1 2014.
Southern Africa led construction activity on the continent, accounting for projects worth $144.89-billion or 44.5% of the total value of projects, Deloitte said in a statement.
West Africa overtook East Africa, attracting $74.84-billion in projects, or 23% of the total projects on the continent by value.
Central Africa experienced a 117% surge in the value of construction projects, amounting to $33.21-billion, while North Africa saw the value of construction projects jump almost 36% to $9.12 billion.
Less projects, more value
East Africa experienced a moderate 10% decline in the value of projects, which totalled $60.67-billion in 2014. The number of projects qualifying for inclusion in the 2014 report fell to 257 from 322 the year before, but the total value of projects under construction increased from $222.77-billion in 2013 to $326-billion.
The bulk of the projects were led by the public sector (143), 88 were private sector initiatives and 26 were classified as public-private partnerships.
Energy and power accounted for 37% of the number of megaprojects undertaken in Africa last year, followed by transport (34%), mining (9%), real estate (6%), water (5%), oil and gas (4%), mixed use facilities (2%) and health care (1%).
The increase in infrastructure construction is driven by an increased output in natural resources, Deloitte said.
This has underpinned rising fiscal expenditure on infrastructure projects to drive international trade with the continent. At the same time, rapidly growing urbanisation and rising domestic demand has ushered in unprecedented foreign direct investment on the continent.