The regional construction industry’s value will more than double in the next six years, driven by new government projects, a new study conducted between 2009 and 2013 has indicated.
The sector’s value will hit $9.3b over the next six years from $4b presently, the study by Frost and Sullivan, a global consultancy firm, indicated.
The increase will be driven by government investments in housing, especially to reduce urban slums, and roads and civil works, it added. This, the study noted, would attract more multinationals to come and invest in the region.
EAC has a population of 133 million and an average annual growth rate of 5.9 per cent, which attracts foreign business and cash.
Rwanda’s construction sector has been growing at an average of 9 per cent per year, contributing about 8 per cent of total GDP.
Commenting on the report, Liliane Mupende, the director general of One Stop Centre and urban planning at the City of Kigali, said the local construction industry plays a big role towards the development of an economy. She added that it stimulates investments in other areas, making it key in the country’s growth strategy.
Roko Construction’s Eng. Kenneth Mwiami, said the projected growth will partly be driven by increased need for permanent structures, especially in urban areas. He noted that the demand for more homes and offices is always going up.
Currently the Ministry of Infrastructure and other government departments are working on different infrastructure projects like the Rusumo and Nyabarongo hydro-power dams, and the Ministry of Sports and Culture in building a multi-million sports complex in Kimisagara. These are besides the numerous projects being done by the private sector.
Silas Lwakabamba, the Minister for Infrastructure, said growth of the sector is fundamental to achieving the country’s Vision 2020 targets.
Financial institutions have recently stepped up efforts to extend credit to the sector, with about Rwf6.8b secured by the Development Bank of Rwanda in December 2013 to fund real estate projects.
According to the Rwanda Development Board, the industry has huge investment opportunities, including building of commercial complexes and shopping areas and producing of building materials required by the industry like bricks and tiles.
Rwanda and other East African Community partner states have planned major infrastructure projects, including the regional railway line and the oil pipeline, that will greatly boost the sector.
In a bid to streamline and improve the construction industry, Ministry of Infrastructure has already drafted a new national construction policy that is tipped to make the sector more competitive.