The face of the African construction industry is changing; more projects on the continent are getting bigger and more complex, currently the annual growth in the demand for heavy construction equipment has remained steady at 4.5% since the second half of the 1980s.
However, demand has changed in terms of region, with the fastest annual growth (about 9%) reported in South Africa and the slowest (about 3%) observed in few unstable countries. The increase in the sales of construction machinery is being fuelled by such factors as the need to expand infrastructure, to construct residential, nonresidential buildings, and to exploit natural resources.
The rapid growth in the overall economy of many African countries has accentuated the need for improving infrastructure. Governments, development authorities and even companies have begun investing in infrastructure development projects in several African countries. Moreover, many African governments have invested heavily in irrigation and mining projects across the continent. All these factors have contributed immensely to the increased use of construction machinery
The key determinant of spending for such equipment is the ability and willingness of sovereign nations and private sector firms to commit funds for fixed investment. This in turn is influenced by a host of factors, chiefly per capita income, the condition of existing infrastructure, the rate of urbanization, and various social conditions ranging from traffic congestion to housing shortages.
It’s approximated that the construction machinery industry in African market worth US$900 million is undergoing a steady transformation by moving from a low volume, intensive use of equipment structure to high volume, and specific use one. In the coming years, the major segments of construction machinery that are expected to grow are excavators, loaders, dozers, dumpers and cranes.
It has been witnessed that unreserved auctions managed by internationally acclaimed companies have also benefited from the flurry of activity in the construction, mining and irrigation sectors in many African countries. Many auctioneers of used and refurbished machineries are riding the boom wave with many bagging orders from African countries. Most of them have managed to bag substantial orders from Africa with many registering as high as a 20 per cent increase in sales to African nations.
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Typically African purchasers emphasize lifetime costs, access to credit, high product quality, and maintenance support.
Some counties like Sudan in Africa have smaller buyers who will actually look at price, as they have limited access to credit; parts availability also is crucial, as they buy used equipment.
Rising demand in Africa
In developing nations, there is a clearcut imperative to put in place utility plants and pipelines and a is a dire need to construct low-cost housing to accommodate a fast-growing urban population.
The boom has started a rippling effect touching various other spheres of activity that are not directly related to the construction industry. Manufacturers of ancillary products such as crane ropes, cables, pulleys and buckles too are benefited from the boom.