Seven reasons to be optimistic about Africa

What significant non-mining infrastructure projects are underway in Africa?

A well-worn argument postulates that infrastructure spending in Africa is focussed on resources due to many countries remaining very dependent on the export of minerals and hydrocarbons. But this is no longer the case. GDP per capita levels in many African countries have climbed past the critical US$1,000 level – enabling consumers to purchase more than just the basics.

Urbanisation has also been an important factor to contend with: Africa had 22 cities with more than two million people during 2010 and will have another 14 of this size by 2020, according to the United Nations. So infrastructure spending can no longer fixate only on export-oriented activities.

Africans are demanding more from their governments in terms of infrastructure. So what are some of the key non-mining-related infrastructure projects taking place, and which countries are undertaking the most and most significant projects at the present time?


The Ethiopian construction industry is the sector benefitting the most from the Government’s Growth and Transformation Plan (GTP) 2010-15. According to Access Capital’s calculations, based on a subset of projects with high contractor use, the GTP will provide revenue opportunities to contractors to the order of US$20 billion p.a. and prospective profits of US$2 billion p.a.

While the immense scale of public sector investment is crowding out some private investment by exerting upward pressure on key non-food prices such as rental rates on construction equipment, the investment is desperately required in an underdeveloped economy with historically low FDI.

Significant investments include the building of a US$4 billion geothermal farm – set to be the largest geothermal plant in Africa – and the Grand Ethiopian Renaissance Dam (GERD), which is expected to generate 6,000 megawatt (MW) of electricity at full capacity.


Accra’s shopping scene has changed significantly in recent years in the wake of oil being discovered during 2007 and exported from 2011. This discovery helped the Ghanaian economy to grow by an average of 8.2% p.a. during 2008-13 and private consumption expenditure expanded by a mean of 7.5% p.a. The country’s growing middle class has attracted many international brands to its retail centres and is seeing a westernisation of shopping trends.

South Africa-based Atterbury Group started construction of the 27,700 m² West Hills Mall during late 2012. The centre opened in October 2014 and is the largest mall in West Africa. Broll Ghana believes modern retail space in the country’s capital will double over the next two years from the current 93,000 m², which should put pressure on rental costs to the benefit of the Ghanaian consumer.


Nairobi is expected to fast track the development of Kenya’s power infrastructure over the next five years in order to keep up with electricity demand in the fast-growing East African economy. Generating capacity currently stands at around 1,650 MW while peak demand is already above 1,400 MW. The economy has 14 hydroelectric, two thermal, three geothermal, one wind, and two other off-grid power generating stations. However, the country is planning to add up to nine solar power plants over the next few years via PPPs.

The Kenya Renewable Energy Association is hoping to generate up to half of the country’s electricity from solar installations as soon as 2016, with US$500 million already invested in the scheme. Electricity transmitter and distributor Kenya Power is planning to spend US$600 million on its distribution network during 2014-16 in order to strengthen its service delivery to commercial and industrial clients towards the ultimate goal of supporting economic growth. Over the long term, Kenya is looking to triple its generating capacity to 5,000 MW by 2030. This aim is still attainable, according to Kenya Power.

Other notable construction activity is found in port, railway and mixed-use developments.


The local construction industry has profited from the long-term expansion of the Lesotho Highland Water Project (LHWP) that started in 1986, as well as other donor-funded infrastructure development. During May 2013, South Africa and Lesotho signed the final paperwork for the US$1.2 billion second phase of the LHWP, set to be concluded by 2019-20.

The second phase includes: the 155m high Mashai Dam; a 19km tunnel/pumping main from the Mashai reservoir to the upstream 185m high Katse Dam; a second 45km long transfer tunnel from the Katse reservoir to the Muela reservoir; upgrading of the Muela hydro-power plant; and a second 37km long delivery tunnel from the Muela reservoir to the Vaal River basin. The third, fourth and fifth phases will add another three dams (all higher than 120m) and 12km of tunnel/pumping infrastructure.

Overall, the LHWP represents the largest investment of foreign money into the country, and will support the country’s earnings from water exports over the long term.


Nigeria recently re-based its GDP which catapulted the country to being the largest economy on the continent. It is therefore not surprising that, similar to South Africa, infrastructure and construction opportunities are diverse and potentially very lucrative. The country has the fifth-largest infrastructure stock on the continent, with capital stock seeing a real average growth rate of nearly 12% p.a. since 2000.

Regarding electricity, the Government is hoping to connect 1.5 million Nigerians per year to the electricity grid in order to have 75% of citizens connected by the year 2020. The Nigerian Electricity Regulatory Commission (NERC) has issued 72 generating licences that should push up generating capacity to 20,000 MW as soon as 2016.

Furthermore, retail activity is booming in Lagos, Abuja, Port Harcourt and Kano. The sector attracted US$1.3 billion in investment during 2012-13.

David Okwara

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