2015 Construction Report on Africa: A focus on Angola

2015 Construction Report on Africa: A focus on Angola

Angola currently has the sixth-largest stock of infrastructure on the continent after recording Africa’s fastest growth pace in fixed capital since the year 2000. The construction sector expanded by double-digit figures over the past five years in spite of a high level of concentration in the industry and challenges in obtaining credit. This significant growth has brought in large amounts of foreign investment and Angola has the continent’s second largest number of construction-related jobs at foreign-affiliated companies after South Africa.

The oil producing country’s private sector is largely underdeveloped, and economic growth is being driven by government-dominated sectors such as construction, energy and transport. Currently, most of Angola’s oil is found offshore, with little spill-over effects into other industries. Addressing infrastructure constraints in transport, water, and electricity will go a long way in supporting the government’s economic diversification efforts, and should have positive spill-over effects on the wider economy.

The government is planning to spend almost US$23bn on the non-oil economy during 2015-17 and has identified agriculture, food, services, refineries, public utilities, transport, and logistics as areas that can reduce the country’s dependence on the oil sector. Some of the non-oil projects announced in November 2014 include the Biocom, Kizenga, Pedro and Negras industrial parks (to be implemented during 2015-16) as well as the Kassinga and Kassala Kitungo iron ore mines. Investment will also be sourced from the private sector. Regarding the state’s contribution, fiscal consolidation in response to the decline in oil prices and the associated impact could result in some of these infrastructure projects being postponed. One strategy authorities could opt for, although not confirmed as yet, is that the SWF shift its strategy to invest less abroad and as such take over some of the projects that would have been covered in the fiscal budget.

Foreign Affiliated Construction companies in Africa

Foreign Affiliated Construction companies in Africa

Source KPMG Africa