African in­fra­struc­ture spend­ing dips in 2015

East African Business Week - - INFRASTRUCTURE -

Africa’s in­fra­struc­ture in­vest­ment spend­ing de­creased in 2016 com­pared 2015, ac­cord­ing to Deloitte 2016 African con­struc­tion trends report.

In 2016, 286 projects worth $50 mil­lion and more were be­ing built in Africa, down from 301 in 2015. The fall in over­all cap­i­tal value was $51bn — from a to­tal of $375 bil­lion in 2015 to a to­tal of $324 bil­lion in 2016.

The report, re­leased on Tues­day, said there were 109 projects worth a to­tal of $140 bil­lion in South­ern Africa in 2015. For 2016, project num­bers had fallen to 85, worth $93 bil­lion.

“Africa has seen a down­turn in both the num­ber and value of projects in­cluded this year, in con­trast to pre­vi­ous years,” said Jean-pierre Labuschagne, Deloitte Africa in­fra­struc­ture and cap­i­tal projects leader.

“Global eco­nomic head­winds, low growth and lower com­mod­ity prices have all con­trib­uted to this,” he said.

The in­ter­na­tional con­sult­ing group said there was an un­even fo­cus on in­fra­struc­ture and cap­i­tal project devel­op­ment. Projects in­cluded hu­man set­tle­ments and as­so­ci­ated water, sew­er­age, roads, elec­tric­ity, schools and health in­fra­struc­ture, and not just large con­struc­tion works such as en­ergy, dams, mines, ports and oil and gas fa­cil­i­ties.

The report iden­ti­fied gross fixed cap­i­tal for­ma­tion on a con­ti­nen­tal and re­gional level, and com­pared data col­lected over the last four years.

Re­gion­ally, West Africa had 92 projects — the largest num­ber and worth the most at 120bn. SA had the largest num­ber of projects at 41 for a sin­gle country, fol­lowed by Nige­ria with 38.

“Sev­eral large min­ing projects on the con­ti­nent have been sus­pended,” Labuschagne said. These in­cluded three iron-ore projects worth a to­tal of $30 bil­lion. Mean­while, the rout in oil prices had seen coun­tries, in­clud­ing Nige­ria and An­gola, scram­bling for for­eign cur­rency. This had led to An­gola sus­pend­ing the build­ing of the $8 bil­lion Lo­bito oil re­fin­ery.

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