The construction market in North Africa is booming due to several active high- value projects with approximately US$473bn investment; this is according to a recent market report by BNC Project Intelligence.
The report states that Egypt constitutes a majority of 71 per cent of the total project investments in North Africa this is after the announcement of some major projects on urban construction and utilities sectors, which have a combined value of nearly US$300bn of all project investments in North Africa.
Some of the high-value projects in North Africa include Capital Cairo in Egypt of US$45bn and the Industrial Park in Morocco of US$10bn which all indicate a healthy pipeline of fresh investments in the country.
The BNC report further states that the construction market in the region has been advancing following a period of socio-economic instability in the year 2011, the GDP of North Africa has been growing since 2011 with a six-year estimated growth rate of approximately 20 per cent.
New investment opportunities are opening up as geopolitical tensions gradually ease and governments rebuild their economies to a large scale.
Given the environment of low oil prices, governments are focusing more on different sectors such as urban construction and utilities. An increasing population and urbanization are driving many of the construction projects in the region. The demand for infrastructure and housing is growing in highly urbanized countries such as Algeria and in densely populated cities such as Cairo.
This population increase drives the demand for construction activities in areas like infrastructure, residential and commercial properties, hospitality and healthcare.
Governments’ investment in the utilities sector to address the pressing constraints of the existing powers systems such as planned outages and load shedding are set to develop the infrastructure system, thereby leading more investment in the construction market.
In addition, various technological innovations such as renewable power, energy become more economical and widespread use in the region, and add value to the growth of North Africa’s construction market.
Also, governments’ investment in tourism and hospitality diversify economic movement in North Africa, which, in a way, led to the development of construction business. Morocco invest in tourism sector with an aim to become a top-20 tourism destination by 2020, and Tunisia invest in areas of medical and cultural tourism and ecosystem, thereby attracting foreign investors and private contractors in the business of construction market in North Africa.