By Samkele Mchunu
The Africa Construction Market, valued at USD 58.42 billion in 2024, is projected to reach USD 74.81 billion by 2029, growing at a compound annual growth rate (CAGR) of 5.07% during the forecast period. Despite the setbacks caused by the COVID-19 pandemic, the sector shows promising long-term potential, driven by substantial investments in infrastructure and a favorable business environment.
Pandemic Impact and Recovery
The COVID-19 outbreak in 2020 significantly disrupted the construction market across Africa, impacting residential, commercial, industrial, and institutional sectors.
This downturn persisted over the next two years, reflecting the broader economic challenges triggered by the pandemic. However, government spending in infrastructure is expected to bolster recovery in the short term, providing a foundation for sustained growth.
Investment and Market Dynamics
Africa’s construction market remains a focal point for major global economies due to its abundant natural resources, investment opportunities in energy and infrastructure, affordable labor, and a rapidly expanding consumer market. Key factors enhancing business confidence include favorable economic policies, rising commodity prices, ongoing anti-corruption efforts, and the embrace of democratic governance.
The African government is also playing a crucial role in supporting small and medium enterprises (SMEs). In November 2021, the National Treasury announced a budget allocation of ZAR 2.3 billion (USD 142.4 million) for the fiscal year to aid businesses impacted by the pandemic and to rebuild infrastructure damaged during civil unrest in Gauteng and KwaZulu-Natal provinces.
Infrastructure Projects Driving Growth
Africa’s urban landscape is transforming with numerous major projects, ranging from skyscrapers to new megacities. With over 570 construction projects worth USD 450 billion, the sector is the largest in Africa. The energy sector leads with projects valued at USD 370 billion, followed by transportation projects worth USD 280 billion.
Egypt tops the market with over 300 active projects valued at USD 338 billion. South Africa and Nigeria follow, with projects worth USD 207 billion and USD 200 billion, respectively. Notable projects include Nigeria’s Dangote Refinery, the world’s largest single-train refinery, and Kenya’s Konza Technopolis, a smart city envisioned to become a hub for technology, science, and education.
Chinese Investments and BRI Initiatives
China has established a robust economic presence in Africa over the past two decades, facilitated by its Belt and Road Initiative (BRI). As Africa’s most significant ally, China has invested billions into various sectors, including railways and energy. Noteworthy projects include the Addis Ababa Light Rail, funded largely by the Chinese Export-Import Bank.Despite the pandemic, Africa commenced construction on projects worth over USD 160 billion in 2021, with Chinese-backed projects alone accounting for more than USD 15 billion.
Market Competitiveness and Key Players
The African construction market is moderately consolidated, with a few major international players holding significant market shares. Prominent companies include Vinci, Bouygues, TechnipFMC, China Communications Construction Group Ltd., and China Railway Construction Corp Ltd. The market’s growth potential is expected to intensify competition during the forecast period, attracting more players and driving innovation.
The Africa Construction Market is on a path to recovery and growth, driven by significant infrastructure investments and a supportive business climate. While short-term challenges persist, the sector’s long-term outlook remains positive, promising opportunities for stakeholders and contributing to the continent’s economic development.
Sources: Mordor Intelligence reports on the Africa Construction Market
