Sub-Saharan Africa Construction Market Size, Trend Analysis by Sector, Competitive Landscape and Forecast, 2023-2027
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Sub-Saharan Africa Construction Market Overview
The Sub-Saharan Africa construction industry is expected to be evaluated at $210.4 billion in 2023, growing at a compound annual growth rate (CAGR) of 4.8% over the forecast period. High oil and gas prices and Europe’s shift away from Russian oil and gas continue to present opportunities for the vastly untapped oil and gas market across the region. This will fuel the demand for necessary infrastructure and power-related facilities.
The regional energy and utilities sector is anticipated to grow by 3.6% in real terms in 2023, supported by the increasing focus on developing energy infrastructure, particularly renewable energy, as well as investment in the regional LNG sector.
Sub-Saharan Africa Construction Market Outlook, 2018-2027 ($ Billion)
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GlobalData expects the construction output growth in the Sub-Saharan region to slow down to 2.5% in 2023. In the medium to long term, the region presents an attractive proposition for growth owing to the vastly underdeveloped infrastructure, the rising population growth, and growing urbanization.
The growth over the forecast period will be further supported by investments in the region’s transport infrastructure projects, coupled with the construction of cross-border infrastructure projects. For instance, in mid-May 2023, Ethiopia and South Sudan signed an agreement to construct the Paloch – Mathiang – Maiwut – Pagak highway, that will connect the two countries.
Market Size (2023) | $210.4 billion |
CAGR (2023-2027) | 4.8% |
Historic Period | 2018-2022 |
Forecast Period | 2023-2027 |
Report Scope & Coverage | Sector Overview, Construction Output Value ($ Million) by Country and Sector, Regional Outlook by Key Countries, Key Industry Participants |
Key Sectors | Commercial Construction, Energy and Utilities Construction, Industrial Construction, Infrastructure Construction, Institutional Construction, and Residential Construction |
Key Countries | Angola, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Africa, Tanzania, and Zambia |
Sub-Saharan Africa Construction Market Segmentation by Sectors
The Sub-Saharan Africa construction industry covers commercial construction, energy and utilities construction, industrial construction, infrastructure construction, institutional construction, and residential construction. The residential construction category is predicted to account for the largest regional share in terms of construction output value (Real) in 2023.
Residential Construction: Residential construction was the largest sector in the Sub-Saharan Africa construction industry in 2022, accounting for 30.1% of the region’s total value that year. The sector is estimated to grow marginally by 1.3% in the current year owing to the weak macroeconomic conditions. The increasing focus of regional governments to expand public and private funding towards addressing the housing deficit and providing affordable housing to low-income groups is expected to drive segmental growth over the predicted timeline.
The residential segment is likely to face challenges in the short to medium term owing to higher interest rates and elevated construction costs but offers an attractive proposition owing to the expanding population level, with the region’s population expected to double over the next three decades.
Sub-Saharan Africa Construction Market Share by Sectors, 2023 (%)
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Institutional Construction: The institutional construction segment is expected to account for the smallest regional share in real terms in 2023. The regional sector is expected to expand by 2.2% in real terms this year, supported by investment in the development of education and health infrastructure. For instance, in April 2023, the Kenyan Ministry of Education disbursed KES9.6 billion ($73.4 million) as part of the Junior Secondary Education program, for the development of the country’s junior secondary schools.
Infrastructure Construction: The regional infrastructure construction segment is predicted to account for the second-largest regional share in real terms in 2023. The segmental growth over the forecast period is primarily driven by the expansion of transport infrastructure in the region.
For instance, regional countries including Ethiopia, Cameroon, Tanzania, and Nigeria are working towards increasing regional connectivity through rail, road, and air transport. For instance, Cameroon’s Ministry of Transport is undertaking the construction of the Edéa-Kribi-Campo & Douala railway line, with construction set to commence in Q4 2024 and end in Q4 2027. Furthermore, the sector’s growth will be supported by the CFA84.1 million ($126.2 million) fund provided by the European Union in May 2022 for the construction and upgrading of the 330km Belabo – Ngaoundere railway line.
Industrial Construction: GlobalData expects the industrial construction sector’s output to register an annual growth of 2.3% in real terms in 2023, supported by the gradual improvement in industrial and manufacturing production and export activities. For instance, according to the Bank of Tanzania (BoT) Monthly Economic Review, the increase in exports of manufactured goods largely emanated from textiles, fertilizers, iron and steel. According to the Bank of Tanzania, the total value of exports grew by 22% in 2022. Out of the total, the export of diamonds registered the sharpest growth of 636.3% YoY in 2022 overall.
Energy and Utilities Construction: The energy and utilities construction sector is expected to account for the third-largest regional share in real terms in 2023. The growth in the current year and over the short-term forecast period is anticipated to be driven by the steady rise in the development of LNG terminals in the region.
For instance, in March 2023, the energy ministry of Tanzania announced the completion of negotiations between the government and the energy companies, Equinor and Shell for the construction of a TZS69.3 trillion ($30 billion) liquefied natural gas (LNG) terminal in the Lindi region.
Commercial Construction: The commercial construction sector in Sub-Saharan Africa (SSA) is expected to grow by 1.4% in real terms this year, supported by a pick-up in commercial activities combined with increased investment in the leisure, hospitality, and recreational sectors. The forecast-period output will be supported by credits provided for the development of retail and hospitality sectors. For instance, according to Zambia’s Ministry of Finance, the total value of credits provided to the private sector for the wholesale and retail sector grew by 51.4% YoY in January 2023, preceded by an annual growth of 6.9% in 2022.
Within the regional hospitality sector, the development of new projects is expected to flourish backed by strong investments over the forecast period. Among key building project development is a NGN49.9 billion ($100 million) 170-room hotel in Victoria Island, Lagos, by a Nigerian real estate development company Ekulo Group of Companies.
Sub-Saharan Africa Construction Market Analysis by Region
The regional section of the Sub-Saharan Africa construction market is primarily dominated by four countries namely Ethiopia, Nigeria, South Africa, and Tanzania. These four countries combined are expected to capture a regional share of more than 73.0% in real terms in 2023.
Sub-Saharan Africa Construction Market Share by Country, 2023 (%)
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The construction industry in Ethiopia is expected to account for the largest regional share and expand by 5.6% in real terms in 2023. The industry’s growth in 2023 will be supported by rising FDI, coupled with the re-start of halted development projects, following the easing of the armed conflict. According to the EIC, the country attracted ETB152.3 billion ($2.7 billion) in FDI over the first nine months of the current fiscal year (8th July 2022 to 7th March 2023), marking a Y-o-Y growth of 10%. This is however below the government’s target to attract ETB256.7 billion ($4.6 billion) in FDI during the first nine months of FY2022-23.
The construction sector is expected to remain fairly subdued in real terms this year, edging up marginally. The domestic construction industry is to grow just 0.9% in real terms in 2023, following annual growth of 4.5% in 2022. This slowdown in growth is owing to the impact of elevated costs for materials, energy, and labor, and the continued tightening of monetary policy along with the ongoing cash crunch, which are all expected to weigh on both economic and construction industry growth in the coming quarters.
The construction industry of South Africa is expected to continue sluggish performance into 2023, with the industry projected to shrink by 1.9% in real terms, following annual falls of 3.4% in 2022 and 2.0% in 2021. The estimated decline in the industry’s output in 2023 is attributed to high inflation, rising interest rates, rising energy and construction material prices, and supply chain disruptions.
The construction sector of Tanzania in real terms is anticipated to record a regional share of more than 12.0% in 2023. The domestic growth is aided by the increased investment in the development of the railways, roads, and airport infrastructure. According to the NBS, the construction industry’s value grew by 2.7% YoY in Q3 2022; preceded by Y-o-Y growth rates of 4% in Q2 and 5.4% in Q1 2022.
Sub-Saharan Africa Construction Market Segments and Scope:
Sub-Saharan Africa Construction Market Sectors Outlook (Value, $ Million, 2018-2027)
- Commercial Construction
- Energy and Utilities Construction
- Industrial Construction
- Infrastructure Construction
- Institutional Construction
- Residential Construction
Sub-Saharan Africa Construction Market Countries Outlook (Value, $ Million, 2018-2027)
- Angola
- Cameroon
- Ethiopia
- Ghana
- Kenya
- Mozambique
- Nigeria
- South Africa
- Tanzania
- Zambia
Scope
- Sub-Saharan Africa construction market outlook: analysis as well as historical figures and forecasts of opportunities from the sector and regional segments.
- The report provides an overview of the outlook for the Sub-Saharan Africa construction industry to 2027.
- Analysis of the construction output values (Real) in major countries: Angola, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Africa, Tanzania, and Zambia.
- Insight into the sectoral movement covering commercial construction, energy and utilities construction, industrial construction, infrastructure construction, institutional construction, and residential construction.
- Dedicated section covering key industry participants by country including top consultants and contractors.
Key Highlights
The Sub-Saharan Africa construction market size will be evaluated at $210.4 billion in 2023. The construction market in the Sub-Saharan Africa region is expected to grow at a CAGR of 4.8% during 2023-2027.
Reasons to Buy
- Evaluate regional trends in construction development from insight into output values and project pipelines. Identify the fastest growers to enable assessment and targeting of commercial opportunities in the markets best suited to strategic focus.
- Identify the drivers in the Sub-Saharan Africa construction market and consider growth in developed economies. Formulate plans on where and how to engage with the market while minimizing any negative impact on revenues.
- Accompanying GlobalData’s Forecast products, the report examines the assumptions and drivers behind ongoing and upcoming trends in the Sub-Saharan Africa construction market.
Key Players
Table of Contents
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Frequently asked questions
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What was the Sub-Saharan Africa construction market size in 2023?
The Sub-Saharan Africa construction market size will be evaluated at $210.4 billion in 2023.
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What is the Sub-Saharan Africa construction market growth rate?
The construction market in the Sub-Saharan Africa region is expected to grow at a CAGR of 4.8% during 2023-2027.
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What are the key sectors in the Sub-Saharan Africa construction market?
The key sectors in the Sub-Saharan Africa construction market are commercial construction, energy and utilities construction, industrial construction, infrastructure construction, institutional construction, and residential construction.
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Which are the key countries in the Sub-Saharan Africa construction market?
The key countries in the Sub-Saharan Africa construction market are Angola, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, South Africa, Tanzania, and Zambia.
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Is there a third level of segmentation in the report?
GlobalData’s focus is on providing reliable and accurate data that is supported by robust research methodology. Our reports undergo rigorous quality checks and are based on primary and secondary research sources, ensuring that the numbers and insights provided are trustworthy. However, despite the best efforts to gather comprehensive data, there could be instances where the available data is limited, making it challenging to provide third-level segmentation. In such cases, GlobalData may choose to provide high-level insights and general trends rather than forcing segmentation that may not be backed by sufficient data. This approach ensures that the report’s overall quality and credibility are maintained.
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