The continent is home to many high-growth emerging markets with rising populations and significant infrastructure needs. The G20’s Global Infrastructure Outlook programme estimates that Africa needs about $6tn of infrastructure investment between 2018 and 2040.
But Africa’s project plans also have many challenges to overcome, from political instability to poor infrastructure and a lack of finance. The G20 estimates that Africa’s infrastructure requirements face an investment gap of about $1.7tn.
Covid-19 has added to the challenges. The World Bank estimates that, amid the Covid-19 crisis, Africa’s economy contracted in 2020 by -3.4 per cent to $2.36tn.
With government priorities focused on healthcare, there was less bandwidth to develop infrastructure. Travel restrictions meant private sector clients and contractors found it hard, if not impossible, to get staff on-site. Imports of equipment also became more time-consuming and expensive.
Africa’s population is expected to rise to about 1.35 billion in 2022, up from 605 million in 1990
But Africa is set for a strong recovery, with the IMF forecasting real GDP growth of 4 per cent in 2022. This rebound is likely to spur an increase in project investment.
Population growth is driving infrastructure investment; in 2021, Africa’s population expanded by 2.4 per cent, according to the IMF, and this is expected to continue.
The continent’s five biggest projects markets – Egypt, Nigeria, South Africa, Tanzania and Algeria – account for more than half of all projects in the continent.
Several of the ‘big five’ economies are major oil and gas exporters, and project activity often follows the trends in global oil prices.
On a regional basis, North Africa accounts for over 30 per cent of the value of all projects in Africa, with about $711.9bn of projects planned or under way.
Africa has recorded an average of about $85.7bn a year of project contract awards since 2011, although the value of awards has varied considerably from year to year. The pandemic resulted in a 21 per cent fall in awards in 2020 to $91.9bn. It was still Africa’s fifth-busiest year for awards in the past decade.
For more information and sample pages from MEED Insight's Africa Projects 2022 report, please click here
You might also like...
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.