AFRICAN governments maintained spending on infrastructure, increasing the number of projects by a fifth compared with 2020, in spite of Covid and rising debt levels, according to a study by professional services firm Deloitte.
The Deloitte African Construction Trends 2021 Outlook report covered 462 projects with a value of $521 billion (R7.8 trillion), with projects in southern Africa accounting for $147.7bn of that, while West Africa led the spend and in terms of the number of projects for the first time, with $172.8bn of projects.
South Africa recorded 37, or 34.9 percent, of the projects in Southern Africa, the highest number in the region. Mozambique had 16 projects followed by Zambia with 14 projects and Angola, 10 projects.
South Africa’s projects were valued at $54.7bn and included Kusile power plant, Waterfall City Development, Baywest City Precinct, Steyn City development and the Roggeveld wind power project.
African governments owned the largest share, or 73.8 percent, of the projects across the continent.
China continued to play a significant role in building $172.8bn of infrastructure projects. China activity in the number of projects being built was about one in three projects in 2018, but this had moderated to about one in four in the current study.
The highest number of projects across the continent were in the transport sector - 197 or 42.6 percent of total projects. The energy and power sector registered 88 projects, or 19 percent, of the total, while there were 85 real estate sector projects, or 18.5 percent, of the total under construction.
The number of projects in 2021 increased by 20 percent, from 385 projects in 2020. The total value of projects under construction increased by 30.7 percent.
Alex Moir, the Industrial Products and Construction Leader at Deloitte Africa, said African governments owned 73.8 percent of projects under review, and they were top funders at 31.8 percent, with international development finance institutions (DFI) and African DFI’s also counting as important financiers.
China funded 10.6 percent of the projects in 2021, the single largest by country or region. China remained the largest builder on the continent with 21.4 percent of the projects.
East Africa’s high growth and economic development saw the region lead by the number of projects annually over the three-year period from 2018, but last year the region recorded 102 projects, a decline from 118 projects the year before.
Moir said while governments had big decisions to make about how they addressed big deficits, how to build more sustainable economies and the future of growth, the economic recovery and interface between companies and government were on the rise.
“Seeing Africa’s top regions take action on being investment catalysts and sustainability more broadly is not a choice. It’s an imperative,” said Moir.
He said the pandemic had intensified the pressure to transform, testing capital injection resilience more than ever.
BUSINESS REPORT ONLINE