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Construction is a vital sector of any country’s economy because the physical construction of the developments become the backbone of the nation’s economy that enables goods and services to be distributed within and outside the country.
Furthermore, the functionality of the designs and construction of the developments have an impact on the productivity with which other business activities can be undertaken. Thus it can be said that the infrastructure of a country influences the competitiveness of enterprises and the country’s abilities to attract foreign investment, which is important in an era of globalisation as nations compete to attract foreign domestic investment.
However, with the general economic weaknesses Africa faces as a developing continent it means that we do not enjoy the realities of the above utopia.
Construction in Africa is predominantly funded through the following four Funding mechanisms
Government Funding
The Government is spending the “peoples money” to fund the project.
Private Funding
A project which is funded by a private developer which can be a private individual or company.
Loans
Financial assistance provided by an international bank or international financial institution to the government which is repayable after some time with interest. e.g. a loan from the African Development Bank or a generous loan from generous ‘ China ’
Public-Private Partnerships
A contract between a government institution and a private company, in which the private company bears significant risk and management responsibility, and payment is linked to performance.
Regional Construction Focus
East Africa
With 166 underway projects on our website: East Africa accounts for 23.4% of projects on the continent.
Southern Africa
With 1229 underway projects on our website. The region accounts for 30.7% of all projects in Africa.
Central Africa
With 14 underway projects on our website. The region continues to be negatively affected by lower commodity prices, as all countries in the region are resource dependent. In total Central Africa is home to a few major public projects worth about US$9.8bn.
West Africa
With 66 underway projects on our website. The region accounts for 26.1% of all projects in Africa.
North Africa
With 50 underway projects on our website. The region accounts for 13.2% of all trackable projects on the continent.
Just taking into account the 1 525 projects that are marked as underway on our website out of the 6 412 captured,(with a cidb grading value 8-9. In stages between Conceptual – Underway) we can deduct that Africa requires an unprecedented magnitude of funds that individual countries do not have or just cannot afford to fully invest in. Furthering the dependency of international loans that we receive from the likes of China. This then minimizes the opportunities for local companies to make a sizeable splash in the construction pond.
The lack of funding or rather the ability for African nations to allocate more of their financial resources into construction has also cultivated a culture of non-payment of accounts. The amounts due to construction companies and a failure to make payment in time, lead to horrible liquidation or business rescue of established first-tier companies that boost the sector.
Furthermore due to the general economic weakness in the continent and a high need for infrastructure development means that we see more contracts that are uneconomical if work was to be given to local contracting professionals.
We further see delays in the completion of contracts within the scheduled times, if ever because of a lack of funds: which adversely affect the chances of any African nation attracting good and healthy direct foreign investment to boost the overall economy of the country. Furthermore, it affects local construction professionals because it becomes hard for them to afford to take the work.
Africa’s construction industry deficit is a cause of great distress. The problem of internal funding shortage and the large size of the infrastructure needs, require a lot of funding options. That we have! However, it would be great if we had ones that lessen the over-dependence on international loans because this allows excessive exposure and vulnerability of the continent and its resources.
Responsible lending and borrowing behaviour are required on the part of Africa and its development partners to avoid unsustainable external debt levels which are detrimental to Africa’s construction industry growth.
No matter what cause I pick for my topic, the prevalent effect seems to mimic a viscous airtime advance system cycle: You borrow airtime. Load airtime to pay back the service provider. Clear your debt. Be left with nothing. Then you have to borrow airtime again to survive and in the end, you have not looked after your own interests. In my opinion, the health and growth of the local construction scene by our own labour should be of main interest for the decision makers when funding the sector is concerned.
Concluding I have to admit, I would fail to propose a well developed, practically applicable solution model to the effects I have presented above. However as much as there are a whole lot of challenges surrounding construction operations in Africa, there is potential for growth. If we would just find suitable and positive investment strategies that will work for a developing continent, without harming the wealth of business knowledge, skills and labour we already have, in years to come the industry could be so well developed it would practically fund itself.
Sources:
George Ofori, Ph.D., D.Sc., Funding Construction Industry Development
Deloitte, Africa Construction Trend Reports
BDO South Africa, Saving the Construction Sector
African Business, Boosting development through sovereign wealth funds
Wikipedia
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I am an insanely optimistic ambivert that does everything from the heart instead of the mind. Deeply interested in people and matters that pertain to mankind.
To understand the difference between Residential and Commercial Construction, you must first understand what each one is.
If your brain works anything like mine, when you hear the word “Residential” you may think of homes where there may be a street of houses which all look pretty similar from their green grass lawns and their borders of brightly coloured flowers, this is generally where you would find the consumers and generally where people would live.
When you hear the word “Commercial”, you may think of the public, attracting the public eye and making whatever your commercial item may be whether its a building or product it has to be what the people want, it has to sell to the consumers, generally where one’s workplace would be.
Commercial Construction
According to Wikipedia, “Commercial buildings are buildings that are used for commercial purposes and include office buildings, warehouses, and retail buildings (e.g. convenience stores, ‘big box’ stores, and shopping malls). In urban locations, a commercial building may combine functions, such as offices on levels 2-10, with retail on floor 1”.
A good example of a well-known commercial building in South Africa is the iconic Nelson Mandela Square in Sandton City, Johannesburg.
Here you will find a variety of restaurants, jewellers, banks, etc. and the list goes on. Buildings such as these provides ample job opportunities for people living in the surrounding residential areas.
Residential Construction
Residential Construction is a far more self-explanatory type of building.
Residential construction is the business of building and selling individual and multi-family dwellings. The building unit is divided into single-unit, manufactured, duplex, apartments and condominiums. According to the Oxford English Dictionary, Residential means “designed for people to live in.”
The best example and probably the most obvious one is where you currently live,
Your furniture is made for comfort, your wall personalised with family photos, everything designed how you want it in order for you to be comfortable.
When you buy a new lounge suite for your home you do not invite all of your friends to come and test all the couches in the shops before you buy it, You test them out yourself,
For someone buying furniture for a commercially owned building they generally buy what looks best in a building, not so much what feels best. This is once again to impress the consumer/buyer.
Although Commercial Construction and Residential Construction have a few of the same factors such as the same professionals, Architects and Projects Manager involved with the design and construction, the outcome and the aim of each building being built is different.
It may be great to live close to your local shopping mall, however I would not recommend building a 3-bedroom stand-alone house right next door in your central CDB (Central Business District).
Sources:
Itsallaboutbusiness
Rennieproperty
Wikipedia
Oxforddictionaries
Redfin
Propertymetrics
Pexels
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When I am not at work you will find me spending quality time with my family. You will always find a smile on my face and a snack in my bag.
Projects Infographic: East Africa
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Leads 2 Business Advertising Co-ordinator and Digital Designer
Meqasa Home & Property Fair
06 to 07 Apr 2019
Silver Star Tower, Accra, Ghana
“Amazing property deals you can’t miss!”
The meqasa Home & Property Fair offers property seekers the opportunity to meet with the nation’s top real estate developers, home loan specialists and home improvement vendors to help them find their dream homes, office space and real estate related products and services. There will be various opportunities for attendees to meet new people and identify those leads that are specifically relevant to their businesses.
Nigeria Energy Forum
09 – 10 Apr 2019
Admiralty Conference Centre, Lagos, Nigeria
The Nigeria Energy Forum set to upscale the development of sustainable energy services for all through a capacity building, training and development programme for policymakers, business leaders, energy innovators, professional engineers, industry experts and academics in Nigeria and other African countries.
Tel: +44 777 458 2543
Email: info@thenef.org
East Africa Property Investment Summit
10 to 11 Apr 2019
Radisson Blu Hotel Nairobi Upper Hill, Nairobi, Kenya
The East Africa Property Investment Summit is a leading property event for the entire region’s real estate market. Driven by passionate professionals, fast-growing economies and exciting projects, the real estate sector provides potential and opportunity for the educated and savvy investor or developer.
Tel: +27 (11) 250 2260
Email: info@apievents.com
Kenya Homes Expo
11 to 14 Apr 2019
Kenyatta International Convention Centre, Nairobi, Kenya
The Kenya Homes Expo is the region’s biggest homes show. Targeting the entire African region with a major focus on East & Central Africa, the Kenya Homes Expo is an experiential platform that creates a level ground for real estate players to converge with a ready market for land, homes, financial advice and general real estate information. We are the heartbeat of East & Central Africa, the authoritative voice of the real estate market. Exhibitors ranging from landowners, realtors, contractors, landscape artists, to interior design companies and insurers and bankers, we successfully deliver eye-opening and innovative shows for the real estate industry.
Tel: +254(0)72 522 5650
Email: info@kenyahomesexpo.com
BotsReal Property & Infrastructure Forum
09 May 2019
Peermont, Gaborone International Conference Centre (GICC), Gaborone, Botswana
BotsReal Property & Infrastructure Forum will facilitate the platform for both private and public investors, developers and industry professionals, to network, debate and examine issues and opportunities around the countries property & infrastructure sectors. Through API Events’ regional network, the event will also attract international companies and investors looking for opportunities in Botswana as well as potential partners, suppliers and service providers.
Tel: +27 (0)11 250 2260
Email: registrations@apievents.com
Mining Investment Conference & Exhibition Botswana
21 to 22 May 2019
Peermont, Gaborone International Conference Centre (GICC), Gaborone, Botswana
Mining Investment Conference & Exhibition Botswana is a strategic mining conference and exhibition for the leaders of the mining, quarrying and construction materials industries, bringing together attendees from countries.
Tel: +65 6717 6016
Email: enquiry@spire-events.com
Mining Investment West Africa
28 to 29 May 2019
Swiss Spirit Hotel & Suites Alisa Accra, Accra, Ghana
The Mining Investment West Africa is a strategic mining conference and exhibition for the leaders of the mining, quarrying and construction materials industries, bringing together attendees from countries. Ministers, mining companies, investors and service providers travel from all over Africa, Asia, North America, Europe and Middle East for two days of partnering, networking and business matching. Join us at an invaluable platform to seek new partnerships, new business and new opportunities.
Tel: +65 6717 6016
Email: enquiry@spire-events.com
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Industry Events in Africa March 2019
Mining Investment Nigeria
06 to 07 March 2019
Victoria Crown Plaza Hotel, Lagos, Nigeria
The Mining Investment Nigeria is a strategic mining conference and exhibition for the leaders of the mining, quarrying and construction materials industries, bringing together so many attendees from many countries. Ministers, mining companies, investors and service providers travel from all over Africa, Europe, Asia, North America and the Middle East for two days of partnering, networking and business matching.
Tel: +65 6717 6018
Email: Mahesh.babu@spire-events.com
Buildexpo Ethiopia 2019
21 to 23 March 2019
Millennium Hall, Addis Ababa, Ethiopia
BUILDEXPO Africa is the only show with the widest range of the latest technologies in construction machinery, building material machines, mining machines, construction vehicles and construction equipment. After 19 successful editions of BUILDEXPO in Kenya and Tanzania, East Africa’s largest building and construction fair, it had ventured into the Ethiopian market. The second edition of BUILDEXPO ETHIOPIA will provide an international business platform by enabling global investment opportunities.
Tel: +971 4305 0755
Email: feedback@expogr.com
Regional Energy Co-operation Summit: East
27 to 29 March 2019
Sheraton Addis, Addis Ababa, Ethiopia
The Regional Energy Co-operation Summit: East will take place from 27-29 March 2019 in Addis Ababa, Ethiopia. The meeting will unite regional governments from Kenya, Uganda, Tanzania, Rwanda and Ethiopia, leading utility and regulatory companies from the region as well as international financiers, donor organisations, power developers to focus on what is needed to unlock investment in energy and infrastructure for regional growth and development. Co-locating with the 3rd Off the Grid Summit, the meeting’s agenda will provide networking opportunities and open discussions exploring practical solutions geared at increasing investor appetite in East Africa.
Tel: +44 207 384 8048
Email: marketing@energynet.co.uk
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E-TICKET - KZN CONSTRUCTION 2019, 210x297 (11)-2
Millennial Mom + wife living the hash-tag life. Remember: If You Fail - Fail Forward
Benefits of Subscribing to Open Quotes
Firstly, what is Open Quotes?
Open Quotes is a service where your company details are listed on our online Directory with a full company description, Trades, serviceable regions and contact details as provided by you. Your company is then available to our Leads 2 Quotes (L2Q) subscribers to view and they can choose to send Requests for Quotes (RFQ’s) to your contact. However, as an Open Quotes (OQ) subscriber, Suppliers / Vendors / Sub-contractors can see the tenders our L2Q Contractors are pricing on, that match their serviceable regions and Trades, without having to wait for the L2Q subscriber to send them a RFQ.
For a more detailed explanation of the Open Quotes service, please see the informative blog written by Jo Couto – Are You Open to Opportunity?
Whether you are a Vendor / Supplier / Sub-contractor, the following benefits are available on Open Quotes:
Open Quotes benefits all Vendors / Suppliers / Sub-contractors that are eager for opportunities to strengthen their pipeline. This service puts you in control: you choose the RFQ’s and Awards you respond to, no more waiting for RFQ’s to be sent to you. A simple, pro-active solution that benefits you, and your company.
If you are interested in subscribing to Open Quotes, you are welcome to make contact with me at CecileD@L2B.co.za.
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Sources
I joined the L2Q Team in 2006, as a L2Q Support Assistant and have been the HOD since 2010. I supervise L2Q Bills, Daily Tender Bills, Control Lists and Directory.
Project Infographic: Free State
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Millennial Mom + wife living the hash-tag life. Remember: If You Fail - Fail Forward
Industry Events: Africa New Energy and Mining Leaders Africa Summit
Africa New Energy
26 – 27 November 2018
Radisson Blu Hotel Waterfront, Cape Town, Cape Town, South Africa
The Africa New Energy is the biggest platform for business-critical networking, learning, and commercial growth is back, featuring even more industry decision-makers, high-level representations from government and private sector.
Tel: +44 (0) 207 375 7177
Email: rwatt@newenergyupdate.com
Mining Leaders Africa Summit
28 November 2018
The Venue Summit Place – Menlyn, Pretoria, Pretoria, South Africa
The Mining Leaders Africa Summit provides the attendees with illustrations on the regulatory challenges in the mining industry in Africa. Africa’s most exclusive and interactive C-Level event. The summit will talk all things new and hot right now in the industry, covering key topics around Digital, Innovation, Cyber Security, HSE, Government and more.
Tel: +44 (0) 7929 238 382
Email: darren.roach@energlobeltd.com
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Millennial Mom + wife living the hash-tag life. Remember: If You Fail - Fail Forward
