BUSINESS
into alternative finance agreements to attract
foreign investors, and the development of
critical infrastructure in these regions is well
underway.
“We all know that there is a clear gap
in quality infrastructure across Africa. The
World Bank has stated that by closing the
infrastructure gap, Africa can increase its
GDP per capita by more than 2% annually,”
says Dedasaniya.
Research at Deloitte indicates that Africa
offers one of the best returns on investment
for infrastructure projects. “It is important
that African countries invest more in
infrastructure to attract the investment and
make supply chains less complicated.
Typically, one in 10 projects goes
into execution from feasibility and it is
important that these numbers improve,”
says Dedasaniya. Nonetheless, Deloitte
AfCFTA will make it significantly easier for
South African companies to do business in
the rest of Africa.
“The biggest benefit for South African
companies is that they will get preferential
access to a range of markets that they’ve
never had access to before, including critical
markets in East and West Africa.
Traditionally, South African companies
have operated successfully in East Africa
only up to Tanzania. North of that, the
cost of doing business becomes just too
expensive. However, when the new trade
agreement is implemented, South African
companies will gain preferential access into
the substantial markets of Kenya, Uganda
and Rwanda in East African, and into
Côte d'Ivoire, Ghana and Nigeria in West
Africa,” Bonnett tells Plant Equipment &
Hire during an exclusive interview.
A boom up north
While the construction sector in South Africa
has almost ground to a halt, the whole
continent to the north of its borders are
experiencing a construction boom. The lack
of infrastructure linking countries has up to
now arguably been the biggest constraint
to developing the continent. But several
countries across Africa have introduced a
number of structural reforms and entered
www.equipmentandhire.co.za
tracked 450 infrastructure projects valued at
more than USD50-million to compile their
Africa Construction Trends 2020 report. All
these projects broke ground after 1 June
2019 and are valued at an estimated total of
USD497-billion. The projects are situated in
28 different countries (out of 54 countries
in Africa). This is only the tip of the iceberg,
as there are thousands of smaller projects
ongoing in all African countries of which
not much is publicly known. A quick glance
at the websites of the World Bank, the
African Development Bank, South African
firm Africa House, and Interact Media
Defined’s African Mines Online (African
Mines Handbook), shows the extent of
current developments in Africa. According to
Dedasaniya sub-Saharan Africa continues to
be the second fastest growing region (after
South Asia) in the world at 6.8%.
Sectors in the economy like cement, transportation and plant equipment and hire will
benefit from the construction uptick in Africa.
In addition to new projects, old infrastructure in Africa needs maintenance and
upgrading, which creates additional opportunities. In picture is the old dam wall at
Kariba dam in Zimbabwe.
APRIL 2020
19