Africa Construction Market Key Market Trends

Chinese Investments and BRI Initiative

According to recently held, Forum on China-Africa Cooperation (FOCAC) in December 2018, Chinese President Xi Jinping announced that China will be providing USD 60 billion in financial support to Africa. President Xi gave the following breakdown for the partial distribution of funds: USD20 billion in credit lines, USD15 billion in grants, interest-free loans, and concessional loans, and USD10 billion in investment financing. 

China is Africa’s biggest and strongest ally and in recent years has pumped millions of dollars into the continent. Chinese investment has increased globally, and Africa is the third-largest destination for Chinese investment behind Asia and Europe. However, investment toward sub-Saharan Africa slightly declined in 2017, following the slight drop in aggregate Chinese investment.

In recent years, Nigeria has received relatively large funds from China for railways. China is backing two major standard-gauge rail projects: One is a line from Lagos to Kano, the other is a coastal railway from Lagos to Calabar. 

The country is also involved in building railways in Kenya, Ethiopia, and Zambia, among others. For instance, the Chinese Export-Import Bank provided 85 percent of the funding for the USD 475 million Addis Ababa Light Rail, which serves 4 million of the city’s residents. The investments in energy though mainly made up of oil and gas investments also comprised investment in clean energy such as hydropower. 

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