The Africa construction market was valued at around USD 5.4 billion in 2020 and is expected to register a CAGR of 7.4% during the forecast period (2021 – 2026). The market was negatively impacted by Covid-19 in 2020/2021. Over the next two years, growth is expected to remain impacted due to the economic downturn caused by the COVID-19 pandemic, across the residential, commercial, industrial, and institutional sectors in Africa. Despite near term challenges, the medium to long term outlook remains positive. Over the short term, investment in the construction industry will be driven by government spending in the infrastructure sector. The African construction industry is the target destination for most large economies. This is because of accruing benefits and/or advantages such as availability of huge natural resources, huge investment opportunities in energy and infrastructure, cheap labor, and a fast-growing consumer market. Also, there is a beneficial business environment that includes favorable economic development policies and rising commodity prices in addition to continued progress in the fight against corruption and the adoption of democratic governments.
As a region, East Africa has the largest number of recorded projects with 139 projects. North Africa accounts for the largest share of projects in terms of value at 31.5% (or USD148.3bn). The projects included are spread over 43 of Africa’s 54 countries. Egypt is the single country having the most projects with 46 projects (9.5% of projects on the continent) as well as the most projects by value at USD79.2bn (17% of the continent’s value), edging out South Africa and Nigeria respectively.
Construction is a very diverse industry that includes activities ranging from mining, quarrying and forestry to the construction of infrastructure and buildings, the manufacture and supply of products, as well as maintenance, operation and disposal. The Africa construction market covers the growing construction projects in different parts of African countries like Eastern Africa, Southern Africa, Western Africa and Northern Africa across all the sectors, like commercial construction, residential construction, industrial construction, infrastructure (transportation construction), and energy and utility construction. The market further segmented into type of construction projects like additions, demolitions & new constructions and new constructions.
Mentor HRS understands that the projected trends in this sector comes with very many opportunities for local companies, but we also understand that because of the many governance and capacity issues among most African startups and midsized institutions, these opportunities remain a far dream. At Mentor HRS we support institution get the right manpower, capacity, and management systems/structures to allow them effectively compete in the construction industry that continues to attract the “big boys” from the large economies. Africa companies needs to step up in order to partake of the African construction boom.