AFRICA (African countries are forecast to see 2.6% GDP growth in 2020):
Ethiopia, Ivory Coast & Kenya will continue to be the top three African countries for construction growth in 2020. Ethiopia is forecast to see 6.7% GDP growth in the 1st Q of 2020, the Ivory Coast will see 6.6% in the same Q, and Kenya is projected to experience 5.5% to 5.7% GDP growth in the 1st Q of 2020. This growth will be driven by housing, schools, hospitals, commercial facilities & infrastructure construction projects. The Kenyan construction sector is continuing to see expansion as we transition into 2020, a number of large Infrastructure and Industrial projects have recently been announced.
South Africa’s construction sector continues to face difficult times going into 2020. Reduced government funding in infrastructure projects by government, and low foreign capital investments are the main reasons for this situation. The South African construction sector is continuing to see a serious contraction as we transition into 2020, political infighting and a lack of external investment are the root cause of this problem. South Africa’s recently elected President Ramaphosa promises to create jobs & work for the interests of all citizens. President Ramaphosa has been busy trying to attract more than $100 billion of investment over five years to boost the South African economy, a high percentage of this fund would be focused on infrastructure projects. Slow GDP growth of between 1.4% & 1.8% is forecast for 2020. A shortage of skilled workers both in construction & manufacturing will continue to stymie South Africa’s economic growth in 2020 & beyond. The appropriation of farms owned by white South African farmers is a problem that needs to be addressed by the South African Government. Depressed minerals / commodity prices continue to hold back the South African construction sector. Business confidence is considered to be at a near all-time low in South Africa, historically one of the major economies of Africa. Inflation is forecast to be in the 5% to 6% in 2020.
Nigeria is set for a significant increase in construction spending in the next three to five years, assuming it can get its political house in order, the Nigerian population is forecast to grow to 250 million in the next ten years. Inflation in Nigeria is forecast to be 10% to 14% in 2020, Nigeria’s GDP is forecast to grow in the 1.9% to 2.2% range in the 1st Q of 2020. Nigeria should see an upturn in construction activity in 2020, new single and multi-family housing units, and new infrastructure projects and increased spending on oil & gas projects will fuel this activity.
Other African counties are expected to see an uptick in construction activity, these countries include Zambia, Tanzania & Rwanda. These counties are forecast to experience between 5% & 6% growth in 2020. Angola, Cameroon, Cote d’Ivoire & Tanzania, are all forecast to experience above average GDP growth in the 3% to 4.5% range in 2020.
Egypt is starting to see some encouraging signs in its construction sector, 1st Q 2020 GDP growth is forecast to be between 5.1% & 5.3%, however inflation is really high at 6% to 7%, unemployment is also a problem in Egypt, the current rate is in the 7% to 12% range. Morocco is beginning to see some promising signs in its economic / construction sector, 1st Q 2020 GDP growth is predicted to be between 2.8% & 3.2%.
If oil remains in the $55 to $65 a barrel range there could be an uptick in Oil / Gas construction activity in Nigeria, Angola, Uganda, Equatorial Guinea & Cameroon, if oil prices retreat & stay below $50 a barrel the opposite will be the case.