Oil and Gas spur infrastructure development in East Africa

The recent discoveries of oil and gas in East Africa are boosting infrastructural developments in the East African region, according to the Deloitte on Africa: African Construction Trends Report 2013.

The quests for better transport infrastructure, reliable energy are also driving this growth, according to the report.

Of the projects surveyed throughout the entire African continent, the East African region accounted for 93 projects, representing 29% of all the surveyed works, with a value of about US$67.7b.

At the unveiling of the report in Kampala on Tuesday, Dr. Mark Smith, Deloitte’s partner for Infrastructure and Capital Projects noted however, that development of public sector projects such as road and railway works, ports development dwarf those orchestrated by the private players.

“In the East Africa region, over 70% are projects that are being built for the public sector,” he said.

Smith noted that with the shifting from exploration to production of oil reserves in the near future, developments in the region will increase even further and edge closer to the matching the investments in the public sector.

The Southern Africa region—boosting of Africa’s biggest economy; South Africa, leads the way with 124 projects underway, accounting for 38% of all African projects.

West Africa has attracted investment worth $15.3b, accounting to 5% of the continent’s projects.

North Africa, accounts for 7% of the surveyed infrastructure development valued at about $6.7b.

Pottas said the political upheaval that was started by the Arab spring was the major reason for North Africa’s lagging behind.

Similarly, Central Africa, which is a potential continental hydro power hub, hosts only 5% of the continents projects with a value of about $15.3b. The insecurity in the region is also responsible for this trend.

The report surveyed projects with the value of more than $50m, on which construction began, but was not completed before June 1 this year.

Story by New Vision

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