As many African states emerged at the end of the millennium from decades of crippling post-colonial civil wars and entered into a new period of relative stability, they faced a staggering infrastructure deficit.
Africa is the second largest continent by geographic area and the second most populated continent in the world, with a population of approximately 1.2 billion people. The United Nations estimates that Africa will see its current population of 1.2 billion people double by the year 2050. That’s an expected growth of 42 million people per year – basically Argentina’s population on a yearly basis. Africa’s population is the youngest of all the continents, with a median age of 19.7 in comparison to the global median age of 30.5.
In 2010, the World Bank reported that in most African countries, infrastructure is a major constraint to doing business, depressing firm productivity by approximately 40%. In over 50% of African countries, power is cited as a major business obstacle. To put this in perspective: the 48 countries of Sub-Saharan Africa, with a combined population of 800 million people, generate roughly the same amount of power as Spain, which has a population of 45 million people.
Compared to other continents, Africa is characterised by low overall population density, low rates of urbanisation, rapid rates of urban growth, a relatively large number of land-locked countries and numerous small economies. The cost of providing infrastructure in Africa is higher than anywhere else. Africa’s infrastructure deficit is not limited to electricity supply; it also suffers from major infrastructure deficit in respect of water supply and sanitation, irrigation, road networks and information and communications.
Africa’s growth improved remarkably in the first ten years of the new millennium with infrastructure contributing to almost half of Africa’s improved growth performance.
The 2017 Deloitte Construction Trends Report included 303 projects valued at US$50 million or above, with a total value of US$307 billion. The report states that, as a region, Southern Africa has the largest number of projects (93), while West Africa remains the region with the largest share of projects in terms of value.
The infrastructure projects cited in the report are spread between 38 of Africa’s 54 countries. South Africa is cited as the country with the most projects (44 projects), while Nigeria has the most projects by value (US$ 69.1 billion). The majority of projects fall within the transport sector (36%), followed by real estate (22.4%), energy and power (19.1%), and shipping and ports (7.9%). African governments make up the largest owners of infrastructure projects in Africa.
Recently, Africa has seen an increase in smaller value projects, valued between US$50 million and US$500 million range. This reflects the fact that true mega-projects are slow to implement and complex to construct and commission.
Stoffel recently attended the 8th International Society of Construction Law Conference in Chicago and sat on a panel discussing “Trends in Various Jurisdictions on Construction Law” with attorneys from Australia, Dubai, London, Paris and South Korea. This cutting-edge conference focuses on the global practice of construction law, including insights into the legal, business, and economic challenges and opportunities in construction today. The conference also sees the exchange of best practices from experts selected from all around the globe.
For more information, contact: stoffela@stbb.co.za
