Boom time for African construction: Chinese and Arabs lead construction charge.

Several factors have come together to create the greatest construction boom in Africa since the heady 1970s. While the 2010 World Cup has led to a frenzy of construction projects in South Africa, the rest of Africa is also riding the crest of a construction boom thanks to high oil and commodity prices, the Chinese presence and growing interest from the Gulf states. A $70bn bridge between Djibouti and Yemen may be the most spectacular project on the drawing board, but a host of other ventures up and down Africa are changing the skyline of the continent as never before.

African cities are currently undergoing a strong boom in construction on the back of generally higher levels of economic growth and greater confidence in the continent's future.

New airports, port terminals, hotels and city centre banks and office blocks are springing up across the continent but two main factors seem to be behind much of the activity. In South Africa, construction firms are gearing up for the 2010 Football World Cup, with even unconnected ventures now aiming for completion by 2010, such is the aura created by the upcoming event. Elsewhere, Chinese financial clout is enabling the development of scores of construction projects on a scale not seen since the heady days following African independence.

[ILLUSTRATION OMITTED]

As by far the continent's biggest economy, it seems natural that many of the biggest construction projects are located in South Africa. Some 2.4m homes under the country's public housing programme have been completed over the past decade, a remarkable achievement by any measure.

At the other end of the scale, Africa's biggest shipping mall was completed in Soweto at the end of last year. The $92m Maponya Mall includes 200 shops, plus a cinema, restaurant and other leisure facilities, demonstrating that new building projects are not confined to the wealthy, traditionally white suburbs. Residential building projects are also helping to push up property prices in Soweto.

The drive to complete so many projects in time for 2010 has undoubtedly driven up construction costs in South Africa, as architects, engineers and building workers all find themselves in a strong bargaining position.

The chief executive of the 2010 World Cup organising committee, Danny Jordaan, has conceded that the final price tag for the five modernised and five new stadia is likely to exceed the agreed $1.24bn budget by a wide margin. He told journalists: "Final costs of the stadiums are soaring as a result of the downturn in the world economy. We don't know what the final impact of the economic downturn and rising fuel prices will be on our costs. It's unfortunately a moving target."

Yet escalating construction costs are almost par for the course for any event on this scale anywhere in the world. In addition, the World Cup will give South African construction companies the opportunity to advertise their capability to the world.

With 94,000 seats, the biggest venue will be the Soccer City Stadium in Johannesburg, but it is vital that all of the new stadia, hotels and other structures being developed in time for the first matches in June 2010 have a use after the competition is over. If South Africa ends up with a series of white elephants then enthusiasm for similar if smaller ventures elsewhere on the continent could be reduced, stemming the drive for big event construction projects throughout Africa.

Large sporting facilities built in the rest of sub-Saharan Africa have too often begun to decay within a very short time. The stadium, swimming pool and velodrome built for the All African Games in Abuja in 2003 have had very little use since the closing ceremony. The city lost out to Glasgow in the race to host the 2014 Commonwealth Games and now other African governments could be deterred from bidding for similar competitions because of the financial cost involved.

Sporting construction projects elsewhere in Africa have suffered from a lack of funding and also cement shortages in some areas. For instance, Zambia has been banned from using the Independence Stadium in Lusaka because of its poor state of repair, while work on upgrading the Konkola Stadium in the north of the country has been delayed by a nationwide lack of cement.

[ILLUSTRATION OMITTED]

The rate of new build projects has picked up across Zambia over the past two years, partly because higher copper prices have boosted the national coffers but also as a result of the wave of Chinese investment in the country.

Chinese, Arab involvement

Indeed, Chinese support looks likely to fund a brand new 40,000 seater stadium in Ndola in the Copperbelt. Although the contract was only signed as recently as last September, a consortium of Chinese state owned companies has pledged to complete the $70m venture before the 2010 World Cup kicks off in South Africa, putting yet more pressure on the nation's overburdened construction resources. As a result of the deal, a Zambian parliamentary committee has voted to demolish Independence Stadium.

While copper revenues and Chinese investment is enabling building work in Zambia, it is the combination of Chinese support and oil money that is driving the biggest construction boom in the history of modern Sudan.

Chinese National Petroleum Corporation (CNPC), which is the biggest foreign investor in the country, completed its new Sudanese headquarters building in Khartoum earlier this year, while the Sudanese government is funding many projects itself.

Specifically Chinese projects include the Friendship Hall conference centre and Chinese school, and many of the new buildings even incorporate elements of Chinese architecture.

Khartoum International Airport has gained a new arrivals hall despite the fact that a new $500m airport is due for completion in 2011. The Rotana Group of Abu Dhabi has built a new luxury hotel in the Sudanese capital but even this has been overshadowed by the Al Fatih Tower on the Nile, which is shaped like a dhow and is based on Dubai's Burj Al Arab building. The $80m hotel has been financed by the Libyan government and has 19 floors. Confidence in the property sector has grown so rapidly that rents for modern apartments in Khartoum are approaching South African rates.

Most reports of Chinese investment in Africa argue that support is limited to countrieswith oil, copper and the other raw materials that are required to sustain economic growth in the world's most populous country. Yet the streets of the Ethiopian capital, Addis Ababa, increasingly feature Chinese buildings. The city's road network is changing out of all recognition but new schools, colleges and dams are all being developed by Chinese companies, such as the China Road and Bridge Corporation (CRBC).

Beijing may be interested in extending its diplomatic influence across the continent, but energy and mining commodities are clearly not its only motivation.

While Chinese investment and African oil money is financing much of the construction work, Middle Eastern oil revenues could fund Africa's biggest ever construction project. Tarek Bin Laden Construction has proposed developing a bridge across the Red Sea from Djibouti to Yemen. Stretching 28.5km, it would include three road lanes and a railway in each direction. The limited economy in Djibouti and its immediate vicinity means that massive investment in new road and rail links would be required in order to connect the bridge with the biggest markets in North, East and possibly West Africa. A $70bn price tag has been put on the venture but this would also include the cost of beginning to construct new towns at either end of the massive structure. Oil rich Gulf governments and investment funds could be attracted to the project because it would allow millions of African Muslims to make the Hajj to Mecca each year.

[ILLUSTRATION OMITTED]

The scheme may be something of a distant aspiration rather than a realistic plan at present but the fact that a large construction company has taken the time to draw up the plans highlights both the huge reserves of money building up in the Middle East and cautiously growing optimism over the wisdom of investing in Africa.

Foreign worker drawback

One major drawback with all of these projects is that the architects, engineers and other relevant experts usually come from outside Africa and are employed by foreign firms. In the case of many Chinese backed ventures, even some construction workers are brought in from China. South Africa may have a burgeoning building trade but it is vital that foreign firms work in partnership with African architects and builders to improve local standards where this is required. Otherwise the current pattern of a handful of "international quality" buildings surrounded by poorer quality constructions, which dominates many African city centres, will continue.

In Angola, for example, oil revenues and Chinese support are being used to build a variety of new structures but Chinese workers are often used even on small school or clinic projects, restricting the type of jobs available for the millions of unemployed and underemployed Angolans to security and catering positions. Even most materials used on such schemes are imported from Chinese factories, again preventing the benefits of such investment from trickling down through the rest of the economy.

The construction boom is yet another sign of improving economic fortunes for the world's poorest continent. There may be a variety of specific reasons behind all of these projects, from high commodity prices to Chinese interest in African resources, yet Africa's ongoing construction boom certainly is a vote of confidence in the continent's future.

Building projects of all kinds generally take many years to pay back the cost of development, so investors seem to be banking on long term economic growth. It remains to be seen whether the boom will be sustained but there is no sign of it running out of steam just yet.