COVID-19 disrupted construction markets in Africa more than elsewhere, leaving most markets running lukewarm or cold, and many observers expecting the continent to take at least two years to return to pre-pandemic levels of output.

Other challenges dog markets in the region, including red tape, increasing contractor insolvencies, lack of confidence, uncertainty, rising costs and an excess of contractors. Meanwhile, the divergence in growth rates between warmer and cooler markets are creating growing pockets of both labour shortages and surpluses. Encouragingly, labour availability is expected to increase rather than decrease over the next three years. However, build costs have risen sharply in many markets, often topping 10 percent in 2020, with a similar pattern expected in 2021. Build cost inflation appears to be higher in Africa than in other regions.

Future outlook

Despite the challenging backdrop of the global pandemic and external economic shocks, the African Development Bank forecasts that the African continent as a whole is expected to recover from its worst recession in half a century.

Africa will need to look to the international community for support with its debt and development finance challenges. It will need to unlock a multi-pronged policy approach to deal with the consequences of the pandemic, including key investments in health and social care, increased social safety nets and retooling of Africa’s labour force.

Progress of the environmental agenda

Africa presents a mixed picture on sustainability. Only South Africa has a policy commitment to zero carbon, though it generates a third of carbon emissions in a continent that accounts for less than 4 percent of the world’s emissions, but 17 percent of its population.

Zero-carbon projects may be relatively rare in Africa, but there are strong expectations for “green” job creation and rising availability of “green” skills. The skills in greatest demand relate to solar PV, understandably given Africa’s huge potential to become a solar powerhouse able to produce twice as much energy for a given land area than in Europe as a result of its greater seasonal stability.

Regional construction cost performance

Top three construction challenges