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African investment in transport construction set for rapid growth

Published by , Editorial Assistant
World Cement,

According to GlobalData, investment in transport (road, bridge, and railway) construction in Africa is set for rapid growth from US$47.1 billion to US$69 billion in 2020 (in normal terms). This is 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$7.6 billion, US$9.5 billion, and US$5.6 billion respectively in 2019, to US$9.8 billion, US$8.5 billion, and US$7.5 billion in 2020.

GlobalData is currently tracking 448 large-scale transport projects across Africa worth US$430.3 billion in both the public and private sectors at all stages from announcement to execution.

When completed to their entirety, the tracked projects will total over 110 000 km in length (54 110 km for roads, 55 345 km for railway, and 599 km for bridges) of which 75 297 km will be newly constructed, 29 197 km will be upgraded, and 5561 km will have an element of both construction and upgrade, crisscrossing the African continent.

Investment rates in transport infrastructure have been increasing, thanks to major continental initiatives, such as the Program for Infrastructure Development in Africa – a strategic continental initiative for mobilising resources across African countries to transform Africa through modern infrastructure.

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$1.87 billion in financing to make it fully functional, while the Central Corridor needs an investment of US$1.67 billion 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 region, whose development is one of the 16 priority continental infrastructure projects identified on the continent’s scale.

“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,” said Yasmine Ghozzi, Economist at GlobalData. “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 realisation that to do so requires industrial integration and infrastructure development.

“The March 2018 agreement to establish the African Continental Free Trade Area has potential to be a turning moment 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, and hence providing connectivity between rural, national, and international networks,” Ghozzi concluded.

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Construction news Cement news 2018