Investment in Africa infrastructure projects up 46% in 2014

Investment in African mega-projects was up 46 percent to US$326 billion in 2014, 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 US$50 million and to have started by June 1 2014.

Southern Africa led construction activity on the continent, accounting for projects worth US$144.89 billion or 44.5 percent of the total value of projects, Deloitte said in a statement.

West Africa overtook East Africa, attracting US$74.84 billion in projects, or 23 percent of the total projects on the continent by value.

Central Africa experienced a 117 percent surge in the value of construction projects, amounting to US$33.21 billion, while North Africa saw the value of construction projects jump almost 36 percent to US$9.12 billion.

East Africa experienced a moderate 10 percent decline in the value of projects, which totaled US$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 US$222.77 billion in 2013 to US$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 percent of the number of mega-projects undertaken in Africa last year, followed by transport – 34 percent; mining – 9 percent; real estate – 6 percent; water – 5 percent; oil and gas – 4 percent; mixed use facilities – 2 percent and health care – 1 percent.

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 urbanization and rising domestic demand has ushered in unprecedented foreign direct investment on the continent.

Source: Mail & Guardian