Special focus – Construction market in Mozambique, Ghana, Ethiopia

29-5-2015

Mozambique is a country of only 23 million people in the center-south of the African continent. Yet for the past few years the country has often been among the preferred destinations of system-missions from Italy. The reason, of course, is oil: the Mamba Eni area has discovered its largest gas field. However, when one country becomes interested in another for its energy resources, things start with them but inevitably bring along a broader package of undertakings, with the infrastructure sector in the front line.
There is no shortage of business in Mozambique. The capital Maputo, for example, envisages planned the construction of a Metro with JICA, the Japan International cooperation agency, as its primary provider of finance (with 1.2 billion US dollars). The European Investment Bank and the French Development Agency (AFD), on the other hand, will provide finance of 300 million euros for the renovation of the capital’s airport. Similar figures will be provided by China’s Exim Bank to build 63 kilometres of ring-roads around Maputo. Further north, the main projects concern the Nacala area, where work will commence to build the new port, its coal terminal and railway serving for the Moatize coal mining district (1 billion dollars, financed by Brazilian mining company Vale). In the Pemba area, the Mozambican Government envisages the construction of a 120-megawatt hydro-electric plant on the River Lurio.
Even the residential sector in Mozambique is brimming with projects, mostly promoted by private individuals. In Maputo, for example, the area of the former Facim Exhibition Centre is seeing the development of a maxi-complex of offices, apartments, hotels and shopping centres for a total expenditure of 1.2 billion dollars. As regards tourism, a sector that the Government of Mozambique is keen to develop, the construction of numerous holiday villages is scheduled, with 14 in Nampula Province alone.

Ghana is also a country that has recently come into the international spotlights, thanks to the political stability of its democratic regime dating back to 1992. Hydrocarbons will support the economy and the growth of a middle class capable of pushing the country towards a more advanced consumption.
Transport is at the heart of the construction industry in Ghana. The capital Accra has already seen the expansion of its airport: projects worth 600 million dollars have already been allocated to 4 companies, while 500 million dollars will be awarded for other projects in the course of 2015. In addition, Tamales Airport is also being upgraded (by a Brazilian company) and the runway of Kumasi Airport is being resurfaced, while the design of airports in Bolgatanga, Cape Coast and Ho is awaiting commencement. In the railway sphere, plans have been outlined for the construction of the Boankra Interport (near Kumasi, the second largest city in the country) and railway improvements in the Eastern Railway Line Project. The executive design was assigned by the World Bank to PWCr.
The largest plant engineering project is promoted by the Ghana Gas Company Limited, which is keen to develop the necessary infrastructures for transport, storage and export of liquefied natural gas. As regards the residential sector, on the other hand, the Bank of Ghana has estimated a shortcoming of 1.7 million homes. Economic housing construction projects have been launched in several parts of the country: the most important involves the construction of 5000 units. Lastly, in terms of internet access, construction has started of the eastern backbone and 110 km have so far been installed.

In addition to Mozambique, Eastern Africa also has another promising market for Italian companies. A country experiencing rapid growth with over 90 million inhabitants: Ethiopia. According to At Kearney experts, Ethiopia is one of the realities in Africa with the highest potential, thanks to average annual growth in GDP of 9% and the economic openings promoted by the Government that are attracting significant foreign investment from banks, the innovation field and commerce in general.
In line with its economic growth, Ethiopia in recent years has seen a full-scale boom in the construction industry. The five-year plan 2010-2015 (Ethiopia takes inspiration from China for its political and economic model) focuses mainly on roads infrastructures and energy installations, most of which financed with funds made available for cooperation by the World Bank and the EU, as well as ubiquitous Chinese finance. The first 150 kilometres of the motorway between Addis Ababa and Nairobi in Kenya were inaugurated recently but already there are plans for extending it as far as Djibouti and towards Southern Sudan. The installation of the rail corridor to the North, on the other hand, was entrusted to Turkish companies but Italian companies are already working on a number of subcontracts. Lastly, next year will see the inauguration of the Addis Ababa metro, while the five-year plan 2016-2020 is currently being discussed.
In the residential sector, the Ministry of Urban Development has launched a housing plan that, in the capital Addis Ababa alone, envisages the construction of 600 thousand social housing units. Many existing hospitals in the country will be restructured (preferred over new buildings).
The energy sector in Ethiopia also offers excellent opportunities for Italian companies. Salini is already working on the Blue Nile and River Omo dams, whereby Addis Ababa hopes to become a net exporter of energy to countries in East Africa. In this field, the best opportunities for Italy will be in plant design fields.

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