Nigeria is set to become the largest economic and demographic power in the whole of Africa. Thanks to hydrocarbons, between 2000 and 2013 its GDP grew on average by 8.2% per year, a rate comparable with China’s golden period. According to consulting firm McKinsey, by 2030 Nigeria will rank among the top 20 largest economies in the world. The country can rely on an emerging middle class which is one of the most dynamic in the African continent and with more than 177 million inhabitants it is one of its most populous nations enjoying a high rate of urbanization.
Against this background, it is easy to imagine that the construction sector in Nigeria is extremely vibrant. One particular figure exemplifies the situation perfectly: since 2004, Nigerian cement production has grown on average by 10.9% per year and in 2013 alone posted an increase of 15.6%.
According to the latest estimates by the Government in Lagos, the country will have to build 20 million new homes to cope with the rush of people moving from the countryside to the cities. Not many people in Nigeria, however, can afford a new home. And that is why in January President Goodluck Jonathan launched the Nigeria Mortgage Finance Company to facilitate access by the people to subsidized mortgages and thus boost the housing sector. Funds for this operation will be partly provided by the World Bank and, in the intentions of the Government, should lead to the construction of 75,000 new houses a year.
One of the most interesting residential projects in Nigeria today is Eko Atlantic, a neighbourhood on the outskirts of the capital Lagos that can host 250,000 people and handle 150,000 commuters daily in its office and business facilities.
As regards infrastructures, in March the NSIA (Nigerian Sovereign Investment Authority) launched a plan ranging across motorways and electricity grids that envisages an initial investment of 100 million dollars.
Lastly, in September, the Federal Executive Council approved the National Integrated Infrastructure Master Plan for the development of all kinds of infrastructure (from transport to energy, water supplies to schools, housing and ICT) which defines not only the priorities in terms of projects but also seeks to rewrite the rules to make them more transparent and more compatible with international standards in order to encourage participation by foreign investors. Over the first five years of implementation of the plan (which will run for thirty years), the National Planning Commission has quantified the public-private investment requirement at 86 billion dollars.
The construction sector in Angola is also currently very dynamic. The 27-year civil war thankfully ended in 2002 but much of the reconstruction of the country has still to take place. Now, thanks to oil industry revenues and stable growth of GDP (between 7% and 8% between 2012 and 2013 but with a setback of 3.9 scheduled for 2014), the country can focus at last on its infrastructures.
The construction sector is worth around 148 billion dollars, equal to 9% of GDP, and is depends heavily on public investment. Private investment, nonetheless, is growing strongly and is mainly focused in the capital and major cities (Lubango, Huambo, Lobito, Benguela).
Luanda is literally an open-air building site: skyscrapers, residential areas, shopping malls and luxury hotels are all being built in line with an urban development plan that some dare to compare with the Dubai’s one. Thanks to substantial credit lines opened by their respective Governments, companies from China (more than 15 billion US dollars), Brazil (over 5 billion) and Portugal dominate the sector which over the last few years has seen the creation of several satellite towns. Such as “Kilamba Kiaxi”, a mega residential project 18 kilometres from the capital Luanda, built by the China International Trust and Investment Corporation using capital advanced by Beijing that the Angolan Government will pay off in through crude oil supplies. The complex is designed to accommodate 500,000 people and a hundred business facilities. Another project close to the capital Luanda soon to be completed is Nova Vida, another residential area for 30 thousand inhabitants. On the popular housing front, lastly, the Government has launched an ambitious “one million houses” project financed exclusively with public funds.
Tourism is currently another growing sector in Angola: to promote this sector, the Government recently set up a new strategy for offering tourist services that focuses initially on domestic demand and will then be extended to the African market in the SADC region (which includes 14 countries: Botswana, Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe and Angola itself) and then include Angola in international itineraries. Many areas have been identified as priorities and are expected to see the construction of hotel facilities and centres focusing on traditional culture and excursions: the Quissama National Park (on the outskirts of Luanda, currently undergoing wildlife re-population in the wake of virtual destruction during the civil war), the Kalandula Falls, in the province of Malange, the Okwango Nature Reserve near Kuando Kubango, the Baía Azul of Benguela and the Namibian Desert. All these projects currently envisage the construction of 200 new hotels and the Luanda Government has estimated that by 2017 around 2.5 million tourists will arrive, growing to 4.5 million by 2020, thereby contributing at least 4% to the country’s GDP.
The construction market in Angola today is dominated by Chinese, Brazilian and Portuguese companies. Italian companies active here can be counted on the fingers of one hand: Trevi and CMC from Ravenna are involved in the construction of a stretch of road (currently awaiting the allocation of the second section of works).
Categorised in: News