The effect of geopolitical events on the construction machinery market in North Africa should not be underestimated
The effect of geopolitical events on the construction machinery market in North Africa should not be underestimated, says David Semple, VP of sales for the Middle East and English- speaking Africa at Manitowoc.
Recent regional events have significantly impacted our sales, and we are coming out of three to four years of low sales volumes in this region.
The infrastructure story in North Africa remains a world apart from the dynamics of other African regions, according to Deloitte’s ‘African Construction Trends Report 2015’.
Attributable to the recent, and in some cases ongoing political challenges in the region, investor confidence varies, the report claims.
However, North Africa is rebounding, EY claims, noting that political uncertainty is fading, and North Africa is becoming increasingly attractive as an investment destination. On the whole, the African economy is expected to grow by 5.7% in 2016, yet North Africa currently accounts for only 3% of total infrastructure projects on the continent by number of projects, as per Deloitte’s research.
The period between 2012 and 2015 has been highly unstable and not conducive to any private or public investments,” Semple says and Manitowoc did fulfil a small number of orders for cranes to Egyptian state companies – mainly in the oil and gas sector – during that time period, but not the volume that a market like Egypt is capable of absorbing.
Despite the low percentage of total infrastructure projects in North Africa, the project value totals $9 billion, showing an increase from $7 billion in 2013, indicating that demand is returning to the region.
The demand in this region remains comparably higher, supported by rich local resources and energy, and less-modernized civil structures
African megaprojects
Investment in African megaprojects jumped 46% to $326 billion in 2014. This growth was led by heavy investment in transport, energy and power, according to the third annual Deloitte African Construction Trends Report.
The report identifies Africa’s rapidly growing middle class as driving demand for sustainable social infrastructure, claiming that Africa is en route to a brighter future and overall will see the opportunities surpassing the challenges facing the continent. Of the construction projects mentioned, 143 were led by the public sector; a further 88 were private-sector initiatives and 26 were classified as public private partnerships (PPPs).
Energy and power accounted for 37% of the mega projects undertaken during 2014, followed by transport (34%), mining (9%), property (6%), water (5%), oil and gas (4%), mixed- use facilities (2%) and health care (1%).
Africa’s infrastructural development is being propelled by increased output in the natural resources sector, which in turn underpins rising fiscal expenditure on infrastructure projects, the report claims.
This has facilitated rising international trade with the continent. Rapidly growing urbanization and rising domestic demand in Africa has simultaneously ushered in a new wave of foreign direct investment in the continent’s biggest and most dynamic economies. The report concludes by confirming continued, intensive construction activity across the continent.
David Semple
The Manitowoc vice president for sales in 45 countries in the Middle East and North Africa, he is A graduate of Bordeaux Business school in France and holder of a MBA from Aston University in the UK, David Semple joined the crane industry in 1998 after a first work experience in Syria. Until 2005 he was managing the sales of Potain tower cranes over the Middle-East region, successively based in France, Lebanon, and the United Arab Emirates.
