https://www.polity.org.za
Deepening Democracy through Access to Information
Home / News / African News RSS ← Back
Close

Email this article

separate emails by commas, maximum limit of 4 addresses

Sponsored by

Close

Embed Video

$223bn in megaprojects under way in Africa – Deloitte report

Medupi power station
Photo by Duane Daws
Medupi power station

27th November 2013

By: Irma Venter
Creamer Media Senior Deputy Editor

SAVE THIS ARTICLE      EMAIL THIS ARTICLE

Font size: -+

The infrastructure boom in Africa had seen investment in 322 megaprojects reach $222.7-billion, said professional services firm Deloitte on Wednesday as it released its ‘African Construction Trends’ report in Johannesburg.

Deloitte Southern Africa infrastructure and capital projects leader André Pottas said the report focused on projects valued at more than $50-million, which had already broken ground, but had not yet been commissioned, as of June 1, 2013.

Advertisement

The report showed that most of the money-pot was being spent on energy (36%, 97 projects) and transport (25%, 82 projects), with the Chinese not as dominant as popular thinking would expect.

Overall, 59% of the megaprojects were owned by governments, 2% by public–private partnerships, and 29% by private investors.

Advertisement

European and US investors owned 17% of the projects.

Ownership by Brazil, Russia, India and China was currently limited, said Pottas, and Eastern and intra-African investors held only 2%.

However, this picture was somewhat different when it came to funding and building the megaprojects.

The majority of project-funding came from China, at $43.6-billion. Development finance institutions were responsible for $43.4-billion of funding, Europe and the US $36.1-billion, and domestic governments $17.4-billion.

China was funding fewer projects, but at a higher value, noted Pottas.

Europe and the US were building 115 projects, private domestic companies 45 projects and the Chinese only 38 projects.

This showed that European and US construction groups were still dominant on the continent, and that South African construction groups were not as active as would have been expected, said Pottas.

Africa was not an easy market to be in, noted Pottas, with South African construction companies active on the continent faced with some stiff global competition.

Region by Region
East Africa was home to 93 of the projects in the Deloitte report, representing 29% of the spend covered in the report, with a value of $67.7-billion.

The currently unstable North African region accounted for only 7%, or 22 projects, of the infrastructure development surveyed in the report, valued at about $6.7-billion.

West Africa had attracted megaproject investment totalling $49.8-billion, representing 21% of the continent’s major projects.

Central Africa, also fairly unstable politically speaking, hosted 5% of the continent’s projects, valued at roughly $15.3-billion.

Southern Africa led in the numbers, with 124 projects, valued at $83.1-billion under way.

South Africa hosted the two largest projects under construction, by value, in Africa, said Pottas.

At least $20.3-billion was being invested in Eskom’s Kusile power station, with the Medupi power station receiving more than $10.8-billion.

Pottas said some of the main drivers for the increased spend in African infrastructure included a move to cater for the people of the continent, rather than following the decades-old pattern of mining Africa’s resources and transporting it to ports for shipment to former colonial masters.

“The growing African middle class is a big factor here, as is urbanisation.

“New energy generation hubs are being forged, transport and logistics corridors are being built and basic social infrastructure is being invested in,” he added.

“Telecommunications connections are being strengthened and development is now starting to touch the commercial property sector on the continent.”

EMAIL THIS ARTICLE      SAVE THIS ARTICLE

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here

Comment Guidelines

About

Polity.org.za is a product of Creamer Media.
www.creamermedia.co.za

Other Creamer Media Products include:
Engineering News
Mining Weekly
Research Channel Africa

Read more

Subscriptions

We offer a variety of subscriptions to our Magazine, Website, PDF Reports and our photo library.

Subscriptions are available via the Creamer Media Store.

View store

Advertise

Advertising on Polity.org.za is an effective way to build and consolidate a company's profile among clients and prospective clients. Email advertising@creamermedia.co.za

View options

Email Registration Success

Thank you, you have successfully subscribed to one or more of Creamer Media’s email newsletters. You should start receiving the email newsletters in due course.

Our email newsletters may land in your junk or spam folder. To prevent this, kindly add newsletters@creamermedia.co.za to your address book or safe sender list. If you experience any issues with the receipt of our email newsletters, please email subscriptions@creamermedia.co.za