Governments remain the single largest developers of infrastructure projects – a common thread emanating from the 2017 edition of the Deloitte Africa Construction Trends Report. This is supported by the fact that governments own between 57% and 90% of tracked projects per region. Moreover, it shows the varied impact of the private sector across the various regions.

The report draws attention to the fact that infrastructure development on the African continent include 303 projects valued at $50m or above, that have broken ground since 1 June 2017. In total, these projects are worth $307bn.

“Investment in infrastructure tends to increase business confidence and lowers transaction costs, making it easier for companies to move people and goods, and to provide services. Governments that invest in enabling infrastructure are seen as more proactive and tend to attract more investors, ultimately making them more likely to achieve economic and export diversification objectives,” said J-P Labuschagne, Deloitte Africa infrastructure & capital projects leader.

Regional development

As a region, Southern Africa has the largest number of projects with 93 projects while West Africa remains as the region with the largest share of projects in terms of value, worth $98.3bn. South Africa is the single country with the most projects (44 projects) while Nigeria has the most projects by value (worth $69.1bn).

The report highlights that large-scale investment into social development projects remains low with only 1.2% of total investment going to the water sector and even less into education. Between 2016 and 2017, there were two fewer energy and power projects in Africa and three fewer healthcare projects. The transport sector – accounting for more than half of projects this year – continues to be the largest sector, with 27 road and bridge projects currently underway.

Either over budget or over time

Research globally shows that an alarming number (nine out of 10) of megaprojects (value of at least $1bn) run either over budget or over time. It should be noted that countries with stronger regulatory and institutional governance frameworks tend to have a lower risk of project overruns.

Emerging markets, with weaker governance institutions, tend to have significant time and cost overruns. At the time of writing the report, only seven of Africa’s top 20 projects under construction are likely to be completed on time. Government-owned projects are the worst offenders, with 83.3% of projects delayed. Three-quarters of private-owned projects are on time. This shows a consistent pattern of overruns compared to global projects.

With over 40 years’ experience in the industry and a founding partner of Hemson Consulting Ltd, an advisory firm specialising in planning policy, municipal finance and related issues, Hughes is the first RICS President based in Canada.

“We must develop more commercially innovative approaches to delivering projects that are affordable and on time,” says Hughes. “To meet this challenge the shortage of skills and capacity must be addressed together with the rights of land owners, and others who are affected by projects. RICS has a public interest perspective and provides international standards that increase transparency which, together, can help to balance the needs of different groups.”

In regard to Africa, James Kavanagh, Director, RICS Land Group recently commented that the developing world is undergoing a revolution in rapid, unstructured and unregulated urbanisation as rural populations flock to ever growing mega-cities, looking to access better education, health care, employment and a new future for their children.

Adds TC Chetty, South Africa Country Manager for RICS: “In many ways, some developing countries are becoming victims of their own economic success with new opportunities for their populations, increased agricultural productivity and better infrastructure. This is across the board of health, social care and education, transport, energy and telecommunications.

“However, with urban growth comes pressure: pressure on scarce resources, pressure on creaking urban systems – including waste and transport – pressure on health care, pressure on land and property – formal and informal – and pressure on energy supply.

“These pressures are not just applicable to the developing world but also to the developed. So how are we as professionals going to help our urban spaces deal with this potent brew of competing interests and pressures?

“Climate change resilience, affordable and sustainable housing, and appropriate building standards also have to be brought into the mix. Urban areas can be epicentres of far-reaching change, whirlwinds of activity and learning, and drivers of change.  But if they’re uncontrolled, they can also act as a distillation of significant risk and potential instability.”

Urbanisation in figures

RICS says the figures regarding urbanisation speak for themselves; in 1950, less than 30% of the world’s population lived in urban areas. The world has already passed the pivotal point where this figure has risen to more than 50%. In 2050, city dwellers are expected to account for more than two-thirds of the world’s population.

Africa and Asia will be the fastest urbanising regions with the urban population projected to reach 56% in Africa and 64% in Asia by 2050 — they currently stand at 40% and 48% respectively.

Most of this investment will be needed in emerging and developing economies. The Programme for Infrastructure Development in Africa estimates that Africa will need to invest up to $93 billion annually until 2020 for both capital investment and maintenance. Currently only $45 billion is financed, which leaves an infrastructure gap of $48 billion per year.

Hughes becomes President in the year Canada celebrates the 150th anniversary of Confederation. In 2018, RICS – a global professional body working across land, real estate, construction and infrastructure – will also celebrate its 150th anniversary.

The anniversary offers an opportunity to celebrate RICS’ past, while ensuring the profession is ready to meet future challenges in the built environment. The celebrations include a global competition to identify solutions to the most pressing challenges facing rapidly growing cities.

RICS will redouble its efforts to fulfil this commitment when it convenes the third Summit of the World Built Environment Forum in London in April 2018. Under the theme ‘Urbanisation, Innovation and Civilisation’, the Summit will focus on the commercial strategies needed to harness the enormous potential of the 21st century’s people and places.

Joining Hughes in the RICS Presidential Team over the next year are RICS President-Elect Chris Brooke (FRICS), based in Hong Kong, and RICS Senior Vice President Tim Neal (FRICS), based in London.

US $9m housing units are set to be constructed in Kajiado County by Kenya Pipeline Company Pension Scheme. This will be its first real estate investment of such an amount in a 101-maisonette gated community in Kitengela, Kajiado County.

Scheme administrator Sammy Njeru confirmed the reports and said that the project will put up on a 10-acre plot has been reserved for the stand-alone units that will retail at Sh10 million for each of the 47 three-bedroomed one-storeyed units. The 54 four-bedroom units will go for Sh11 million.

Mr. Njeru explained that the initiative has presented a valuable opportunity for investment in the sector. The Retirement Benefit Authority’s ceiling on investment in real estate stands at 30 per cent.

“The idea is to have an asset mix that will see our fund’s value grow to almost US$ 100m in the next five years and our diversification into the property market offers the foundation for the planned growth,” he said.

Other projects by Kenya Pipeline Company Pension Scheme

Apart from the current project, the scheme has also purchased a 40-acre piece of land in Kitengela and another four-acre piece of land at Riat Hills in Kisumu County and they are currently in discussions with the 1,542 members and their sponsor, Kenya Pipeline Company, to raise contributions.

The emergence of Kenya Pipeline comes after the multi-million-shilling investments in real estate by pension schemes such as Safaricom’s mega mall-cum-residential units development in Athi River, KPA’s South C project, KenGen’s Rosslyn Springs and Stima’s Runda, Bogani and Loresho properties.

Kenya Pipeline Company Pension Scheme provides cash benefit and pensions for permanent and pensionable employees of Kenya Pipeline Company upon retirement or withdrawal from employment as well as a relief for the dependents of the deceased employees.

A grand Business Park and a five star hotel are set to be constructed in Malawi’s capital, Lilongwe. This was confirmed after the President Arthur Peter Mutharika recently broke ground for the project to commence.

The Lilongwe Grand Business Park will be located in area 46 in Lilongwe. The business park, which is estimated to cost around US $100m, will be composed of a shopping complex, a high class office building and a five star hotel.

The construction is a testimony that the direct investment program is delivering results by bringing money and jobs into the country.

The president pointed out that it is by opening one investment after another that Malawi will be a bigger private sector and it is by building a bigger private sector that there will be creation of more wealth and eventually more jobs.

Chinese Ambassador to Malawi, Shi Ting Wang, also commented and said that although Malawi has an economy majorly focused on agriculture with low productivity in the service area, the Grand Business Park will be an important move towards a comprehensive economic development for the country.

“The Malawian Government has made an effort in creating a conducive environment for investors and we will encourage more Chinese companies to come to Malawi and seek business opportunities,” said Shi ting.

Executive Chairman for China-Lilongwe Grand Holding Corporation Limited applauded the Malawian Government for creating a favourable economic environment for investors and promised to be efficient and maintain high standards throughout the construction of the business park.

The East African Community has finally approved US $55bn towards infrastructure development in the region. The fund was approved during the fourth extra-ordinary sectoral council of Transport, Communication and Metereology (TCM) during its session in Arusha Tanzania.

The main aim of the infrastructure projects is to connect member states and ultimately boost intra-trade in the region. According to Steven Mlote, the deputy Secretary General in charge of Planning and Infrastructure at EAC, the projects will have high impact on socio-economic growth. “The transport links will also connect the bloc with the neighbouring states and will require over US $55bn,” said Steven Mlote.

Infrastructure projects currently underway in East Africa include the Hoima-Tanga oil pipeline, a mega hydropower project at Stiegler’s Gorge along Rufiji river, the Lapsset project in Kenya among others.

The first SGR in the region between Mombasa and Nairobi has been completed and is now being extended to Malaba on the border with Uganda with a spur to South Sudan and Rwanda.

EAC will heavily rely on its development partners to make the projects a reality. Recently, African Development Bank(AfDB) granted US $1.5m for the East African Community road project.

The grant was confirmed through a Memorandum of Understanding signed between the African Development Bank East Africa Regional Resource Centre (EARC), and the East African Community (EAC).

Initial Preparation Phase of the East African Community road road project includes; three key multinational road sections between Masaka-Mutukula stretching 89.5km in Uganda and Mutukula to Kyaka section (30km) as well as Bugene to Kasulo and to Kumunazi, stretching for 133km.

The East African Community (EAC) is an intergovernmental organization composed of six countries in the African Great Lakes region in eastern Africa: Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. John Magufuli, the President of Tanzania, is the EAC’s chairman. The organization was founded in 1967, collapsed in 1977, and revived on 7 July 2000.

Ethiopia will continue with the construction of the Grand Ethiopian Renaissance Dam (GERD) on River Nile despite Egypt disapproval; Seleshi Bekele, the Ethiopian minister of water, electricity and irrigation has said.

His remarks comes even as a ternary meeting to discuss the future of the dam ended without an agreement. Egypt has time and again raised concerns that the huge hydro dam on the Nile would affect its share of water.

Egypt president Abdel-Fattah el-Sissi recently issued a stern warning to Ethiopia over the mega dam. He said that water is a matter of life or death and no one can touch Egypt’s share of water.

This is Ethiopia’s first major dam on the Blue Nile. It will eventually start filling the giant reservoir behind it to power the Africa’s largest hydroelectric dam.

Mr Bekele said that construction of the Dam is 63% complete and is expected to generate electricity soon.

Renaissance Dam

The Renaissance Dam now in its seventh year has had a fair share of its challenges. Early this year Ethiopia Federal High Court sentenced members of a rebel group, the Benishangul Gumuz People’s Liberation Movement (BPLM), for their role in a hand grenade attack that killed nine people in an attempt to disrupt work on the Grand Ethiopian Rennaissance Dam.

Frequent discussions between Egypt, Sudan and Ethiopia on the hydro electric dam have also bore no fruits.

Ethiopia says the dam is essential to its development and has repeatedly sought to reassure Egypt. However, Cairo’s efforts to persuade Addis Ababa to engage in closer coordination over the dam appear to have made little headway.

Ethiopian Foreign Ministry spokesman Meles Alem defended the Grand Ethiopian Renaissance Dam project. He further explained that the country does not need anyone’s permission to benefit from its natural resources.