02 Jul 2019
Posted in Construction
Investment in transport construction in Africa set to reach US$69bn in 2020
Investment in transport (road, bridges and railway) construction in Africa, is set for rapid growth from US$47.1bn in 2019 to US$69bn in 2020 (in nominal terms), based on projects being tracked by GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘African Transport Networks’ reveals that growth in transport construction in Africa is being driven by increasing investment in railway projects. Spending will be led by Nigeria, Kenya and Egypt where transport investment will increase from US$7.6bn, US$9.5bn and US$5.6bn, respectively, in 2019 to US$9.8bn, US$8.5bn and US$7.5bn in 2020.
GlobalData is currently tracking 448 large-scale transport projects across Africa worth $430.3bn in both the public and private sectors at all stages from announcement to execution.
When completed in their entirety, the tracked projects will total over 110,000km in length (54,110km for roads, 55,345km for railway and 599km for bridges) of which 75,297km will be newly constructed, 29,197km will be upgraded and 5,561km will have an element of both construction and upgrade, crisscrossing the African continent.
Yasmine Ghozzi, Economist at GlobalData, comments: “Africa’s lack of infrastructure is a serious obstacle to growth and development, resulting in a low level of intra-African trade and trade with other regions. The continent accounts for 12% of the world population, but generates a mere 1% of global GDP and only 2% of world trade.
“Over the longer term, Africa has huge potential for growth. There is a clear appetite in the region to improve and expand trade, and a realization that to do so requires industrial integration and infrastructure development.”
Investment rates in transport infrastructure have been increasing, thanks to major continental initiatives such as the Program for Infrastructure Development in Africa (PIDA) – a strategic continental initiative for mobilizing resources across African countries to transform Africa through modern infrastructure.
Ghozzi added, “The March 2018 agreement to establish the African Continental Free Trade Area has potential to be a turning point in the continent’s ambition to boost intra-African trade and spur economic development. With this emphasis on regional integration, the focus is on the development of regional economic corridors, particularly important for landlocked countries, interlinking highways, railways and ports in the region, hence providing connectivity between rural, national and international networks.”
In East Africa, the Northern and Central transport corridors serve nine countries: Tanzania, Kenya, Rwanda, Burundi, Ethiopia, the Democratic Republic of Congo, South Sudan, Sudan and Djibouti. Around 34% of the Northern Corridor’s network of roads can be considered to be in good condition. The Northern Corridor needs US$1.87bn in financing to make it fully functional, while the Central Corridor needs an investment of US$1.67bn to revamp the infrastructure and make it fully functional. In Western Africa, the Abidjan-Lagos Corridor is an essential link in the Dakar-Lagos Corridor, which is part of the trans-African highway of the Economic Community of West African States (ECOWAS) region, whose development is one of the 16 priority continental infrastructure projects identified on the continent’s scale.