Building Africa From the Ground Up

Africa Building Boom
Many African countries are currently undergoing a building boom


There is no doubt that both the quantity and the quality of African homes need to be improved. Kigali needs 35,000 new homes a year to keep up with demand but just 1,000 a year are being built. About 80% of houses in Niger are without adequate sanitation and 70% of Tanzanians have homes that have neither been planned nor provided with basic services. Economic growth is driving residential construction but it will take decades to make a real impact on the problem.

The debate over ‘evolution’ or ‘revolution’ continues to rage in the African housing sector. Following on from similar projects in Lagos, Luanda and Nairobi, plans have been unveiled for the construction of a modern new city on the outskirts of Abuja, as part of celebrations over the 100th anniversary of the creation of Nigeria.

The Minister for the Federal Capital Territory (FCT), Bala Muhammed, revealed that the government could help to provide the land but that all construction would be funded by private sector investors. Developers will be required to commit $4bn in what is expected to be an integrated residential, office and leisure area that will house and employ tens of thousands of people.

However, success is not always guaranteed for such schemes. The New City of Kilamba, which was built in Angola by China International Trust and Investment Corporation (CITIC), is designed to house several hundred thousand people but currently has an occupancy rate of just 10%. The weak local mortgage market and the average $170,000 cost of the properties mean that very few Angolans can actually purchase such homes, apart from more prosperous citizens who already own their own houses.

Ângela de Branco Lima Mingas, the director of architecture at Angola’s Lusíada University, said: “Kilamba seems to be more of a vanity project to give Angola a chance to show off to other countries what it can build, rather than a planned response to solving social problems like housing.”

Such huge projects are unlikely to provide modern housing for the bulk of the Nigerian population, so the government is looking to encourage greater access to finance.

Shelter Afrique, a private pan-African housing institution, has reached an agreement with Abuja to provide housing finance and advice to both lenders and borrowers. President Goodluck Jonathan said: “The federal government is looking at some other angles pertaining to the funding of housing. When we think about new towns we must work with key industrialists. If you construct new towns without jobs then there would be problems.”

Elsewhere, in December, Moroccan real estate group Alliances Développement Immobilier (ADI) signed a deal with the government of Côte d’Ivoire to build 7,000 new homes in and around Abidjan, as part of Côte d’Ivoire’s National Development Plan for 2012–2015. The company generates 69% of its income from social housing projects and is now seeking to expand into other parts of Africa.

Ports and Airports

While the airline sector continues to limp along in most of the industrialised world, new airports are being constructed on a regular basis in Africa. Tanzania Airports Authority (TAA) is currently seeking to identify a company to develop Terminal 3 at Julius Nyerere International Airport (JNIA) in Dar es Salaam. The provision of extra capacity is partly designed to encourage the emergence of local low-cost carriers in the country.

Airport and port development is going hand in hand in KwaZulu-Natal, in South Africa. The old Durban International Airport has now been decommissioned and replaced by King Shaka International Airport in order to attract more tourists to the region and boost economic growth within KwaZulu-Natal.

The new airport, also known as La Mercy, is located about 35km north of Durban and has 3.7km of runway, with the capacity to handle 7.5m passengers a year. Airlines such as British Airways, South African Airways and Kulula operate services from the facility, which has already become the ninth biggest airport in Africa.

Dube Trade Port is now being developed next to the airport to encourage businesses to make the most of the export options on offer.

After months of wrangling, the old airport and surrounding area have been given to state transport utility Transnet to develop a new container port. Transnet has failed to secure approval to expand the existing port of Durban in a variety of directions and has now opted to construct a huge new facility on the brownfield site. Construction work on Phase 1 is due to begin in 2016, with the entire project scheduled for completion in 2037. Total costs are estimated at R75bn ($8.6bn) at today’s prices.

The Minister of Public Enterprises, Malusi Gigaba, said that the scheme will “project us beyond South Africa. It’s about the future of the continent, the future of the region, how we facilitate meaningful trade in Southern Africa, how we address unemployment and lack of skills.”

Transnet envisages the construction of a 16-berth terminal with handling capacity of 9.6m TEU – or standard-sized containers – a year, which would cement Durban’s position among the 10 biggest ports in the world. By controlling the entire site from the beginning, Transnet should be able to avoid the lengthy planning process required with each expansion phase at other locations in the country.

Competition for Projects

New container and dry bulk terminals are being developed across Africa, helping to ensure that the port sector is one of the most rapidly growing industries on the continent. New iron ore rail and port projects are being constructed in Sierra Leone, Gabon and Congo-Brazzaville, although political uncertainty has delayed investment in new transport infrastructure in Guinea.

Now that the Japanese government has agreed to fund the construction of a second container terminal at Mombasa, the government of Tanzania is eager to press ahead with the development of its own second terminal at Dar es Salaam.

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