It is ultimately transport infrastructure that has put West Africa en route to a brighter infrastructure future, says a Deloitte report.
The Deloitte African Construction Trends Report 2014 revealed that the total value of projects under construction in West Africa increased from 50 billion US dollars to 75 billion US dollars year-on-year.
However, there was no change in the number of projects qualifying for the report this year at 66.
“There is a growing depth in the West African market. This reflects growing maturity in this region’s infrastructure story of burgeoning investment, activity and tenacity,” the report stated.
“Although the region still accounts for just half of the level of investment in Southern Africa, it is starting to close the gap, consistent with Nigeria’s new title as the biggest economy in Africa.”
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Transport construction projects accounted for 29 per cent while energy and power accounted for 21 per cent.
Mining construction projects accounted for 14 per cent, water accounted for 12 per cent and oil and gas accounted for nine per cent during the reporting period.
“Regional integration is firmly in stakeholders’ sights, with promotion of “infrastructure development to support a competitive business environment, sustained development and cooperation in the region” committed to in the Regional Strategic Plan (2011- 2015),” said the report.
“Although projects of this nature take time and in West Africa, energy supply and backlogs can still present constraints, initiatives such as rail and port developments are enabling the region to make significant inroads.”
The report also revealed that in Francophone countries such as Senegal, Guinea and Togo, the West African Development Bank identified 17 major infrastructure projects which require funding.
“Transactions moving forward on the transport front include the Eastern Railway Line and Boankra Dry Port,” it said.
“In Ghana, priority projects include road development between Accra and Tema as well as Accra and Takoradi, and the expansion of the Tema and Takoradi ports.”
Projects in three new sectors – retail, manufacturing and TMT – were recorded.
The West African funding environment saw Israel, South Africa and the United Arab Emirates enter the equation for the first time, while intra-African firms funded 17 per cent of projects.
According to the report, another rise in funding commitment was seen by the regions governments, whose commitments increased from one per cent to 14 per cent.
In terms of project ownership private domestic firms and European and US firms both owned 18 per cent of projects respectively, reflecting the growth in the local economy and the increasing attractiveness of West Africa.
The report showed that in Nigeria, in particular, within the context of infrastructure development, the scale of opportunity on offer is more apparent.
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“Chinese companies dominate the development of the transport network, particularly in the rail and airport sub-sectors,” it revealed.
“Two projects that demonstrate such dominance are the 1.49 billion US dollar Lagos to Ibadan railway contract, which has been awarded to China Civil Engineering Construction Corporation (CCECC), and the Olokola Deepwater port project, awarded to the China Ocean Shipping Group.”
Other noteworthy projects include the Bonga NW Project, Eko Atlantic City, Lagos Light Rail, Abuja Light Rail in the Federal Capital Territory and Abuja Centenary City.