Rising Debt Levels in Sub-Saharan Africa Will Cloud Construction Growth in 2023

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Rising Debt Levels in Sub-Saharan Africa Will Cloud Construction Growth in 2023

C.Sub-Saharan Africa’s construction output increased by an estimated 1.7% in 2022 compared to a growth of 3.2% recorded in 2021.

The industry is projected to record 3.2% growth in 2023, but significant downside risks remain, most notably rising debt levels across the region, said the data and analytics giant. GlobalData said.

GlobalData’s latest report, Construction Market Size, Trends and Growth Forecasts by Key Regions and Countries, 2022-2026, finds that the IMF’s October 2022 WEO forecast predicts that the region’s post-pandemic economic recovery will reach 2022. It is clear that it has been stopped since the second half. GDP growth in the region is expected to remain at 3.7% in 2023 after slowing to 3.6% in 2022.

Public debt amounts to around 60% of GDP, and several countries in the region are either in debt crisis or at high risk of debt crisis.

GlobalData analyst Dhananjay Sharma commented: Both public and private sector projects face hurdles, government revenues continue to be directed toward efforts to address the impending socioeconomic crisis, and high construction material prices make projects unviable for the private sector. I will. ”

Over the past two decades, Chinese funding has helped Africa cover a $100 billion annual infrastructure deficit, making it a major source of growth for infrastructure projects in the region. However, a post-pandemic slowdown in China’s economy, combined with significant losses in Chinese loans to several countries, has recalibrated China’s interest in the Belt and Road Initiative (BRI) and boosted Chinese investment in the region. slowing down.

At the same time, tightening monetary policy across advanced economies is also impacting the region, with rising interest rates as a result of high inflation weighing on both business investment and household consumption.

Sharma concludes: While in the short term growth will be driven by increased oil and gas project activity due to continued price increases, long-term investments will support the transition to green energy and the potential for renewable energy in the region. will be facilitated by sex. In addition to energy and utilities, investment in the infrastructure and institutional sectors will be facilitated by continued recognition of deficiencies in current transport and utility systems, education and health facilities. ”

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