East Africa saw the largest regional fall-off in number of projects last year, recording a whopping 35% decline.This comes as East African countries significantly cut spending on infrastructure projects. The total project value dropped by 47%.According to Deloitte’s Africa Construction Trends Report 2020, infrastructure projects in Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, Seychelles, Somalia, Tanzania and Uganda dropped by 35% to 118 in 2020 from 182 in 2019 while the total value of the projects declined by 47% to $77.7 billion from $146 billion in the same period.While East Africa has been the fastest-growing region on the continent in the past few years, the outbreak of Covid-19 has had some impact and GDP growth is estimated to drop by at least 5%. The impact of the pandemic on tourism, in particular, has led governments to take a more conservative approach. Debt distress is likely in several East African countries, including Kenya and Ethiopia.According to the report, infrastructure projects in the transport sector accounted for 51.5% ($40 billion) of the region’s total projects, followed by energy and power (23.5%) and the shipping and ports (21.5%) sectors.In recent years, East Africa has prioritised improving its cross-border and local transport infrastructure. The reg ion’s commitment to boosting the sector is evident, with the transport sector totalling 66 projects (55.9%), the highest number. According to the report, the completion of several big projects in the region, such as the Grand Renaissance Dam in Ethiopia (U$4.8bn), also contributed to the sizeable drop in number.The consultancy firm did, however, highlight the importance of infrastructure development as a catalyst for growth recovery saying it had been proven to play a major role in improving output, economic growth and employment in the short term, as well as laying the foundation for productivity and growth in the long term.“Well-targeted infrastructure spending programmes could play an important role in improving poor economic performance and boosting economic transformation. In the short term, governments should prioritise infrastructure upkeep, with available skills and resources directed towards the maintenance and upgrading of existing infrastructure,” reads the report. “Additionally, governments should focus on pre-approved, planned infrastructure projects, accelerate those that are already under construction, and create a pipeline of bankable projects. As governments seek to mobilise increased infrastructure spend, it is essential to ensure that adequate planning is brought forward for African economies to reap the benefits of infrastructure spending efforts.”At present, the most valuable project in East Africa according to the report, is the Bagamoyo mega port in Tanzania. The project, worth US$10bn, is expected to be one of the largest government infrastructure projects in the country and the largest port in East Africa. It has, however, been delayed due to unfavourable investor conditions and demands. East Africa accounted for 30.6% of projects across the continent and 19.5% of the value in 2020. Uganda recorded 27 projects, the highest number of construction projects, followed by Kenya with 26 projects, Ethiopia with 25 projects and Tanzania with 23 projects. The report found that although the number of projects in Tanzania was lower than in other countries in East Africa, the country contributed 43.1% towards the region’s total project value in 2020.
