North Africa construction: trends and developments

The North African construction sector has seen significant growth over the last 5 years and offers interesting opportunities for all players in the industry. The trend continued in spite of the disruption caused by the civil war in Libya, which has blocked a number of the country’s construction projects, as well as the turmoil following the Arab Spring.

The improvement in the socio-political conditions and the North African industry’s capacity for recovery is confirmed by the Africa Construction Trends Report conducted by Deloitte, which reveals that 2016 saw a sharp increase in the number of large projects (42, compared to the 29 of 2015, +45%) valued at US $76.1 billion, almost triple that of the previous year.

Egypt has the largest number of projects (15), followed by Algeria (13) and Morocco (8). In general, transport leads the sectoral mix with 43% of all projects, in line with the 2015 levels. By contrast, real estate has seen a big increase in its share, up from 7% in 2015 to 26% in 2016. Commercial real estate accounted for the largest number of projects, especially in Egypt, but in terms of value industrial real estate tops the list. These are followed by Oil & Gas, Energy & Power, Water, and Shipping & Ports.

The Deloitte report reveals that more than one quarter of all projects were privately funded (domestic or international investors, most from the UAE and USA), while 66.7% are government owned. In general, governments are the largest funders of projects (40.5%), while the rest are divided between director foreign investors and private domestic funders. In terms of who builds projects, Private Domestic companies are well represented (28.6% of projects), as are Italian firms (16.7%). Firms from France (9.5%), China and South Korea (both 7.1% and growing) are also present in the region along with Spanish, Turkish and US companies.

The 10 largest projects carried out in North Africa account for 73.4% of total value and are mainly in the Oil & Gas, Transport, and Energy & Power sectors. Specifically, Algeria is seeing an increase in infrastructure construction projects such as ports, roads, telecommunications, transport and public building, while Egypt has begun work on construction of the new megacity to the east of Cairo. Similar projects are under way in Morocco and Tunisia. In general, all countries in the area are stepping up their economic efforts to bridge the housing gap, especially in the social housing segment. 

Read focus on Countries:

Algeria | Egypt | Tunisia | Morocco | Libya