Rwanda’s construction industry valued at $1.3bn in 2024 – report

Rwanda’s construction industry has an estimated value of $1.3 billion in 2024 and it is expected to reach $1.4 billion in 2025, according to Afreximbank’s Industry Outlook report. The report, launched on the sidelines of the African Investment Forum on December 4, indicates that Rwanda is poised to be one of the fastest-expanding construction markets in Africa over the coming decade, fueled by the infrastructure projects like the $2 billion Bugesera International Airport. ALSO READ: Rwanda’s new international airport ground-level works 85% complete The Bugesera airport project will feature a main terminal building spanning 130,000 square meters, to host eight million passengers annually, with expectations to increase to over 14 million in subsequent years, along with a cargo terminal. The airport will be connected to the regional Rusumo hydroelectric power as a way of increasing the uptake of renewable energy. Cairo International Airport (20 million passengers) and South Africa's OR Tambo International Airport (15 million passengers) were the only airports in Africa with annual passenger numbers higher than this in 2022, according to the data. The report highlighted that the construction sector growth in the country will be driven by the new industrial strategy that focuses on the pharmaceuticals and ICT sectors. Overall, East Africa is estimated to have a construction industry value of $48.1 billion in 2024, comprising around one-quarter of Africa's total, and increase by half to around $73 billion by 2028. ALSO READ: City of Kigali mulls new plan to construct 10,000 affordable houses, upgrade slums This growth will be driven by Tanzania where a standard gauge railway is being developed. It will also be propelled by on-going construction of industrial parks in Ethiopia. Residential and oil sectors will be the main drivers of Kenya’s construction activity, with the development of the $3.4 billion South Lokichar oil project from 2025 to 2028. Population growth vis-à-vis construction growth Although Africa's construction industry will remain far smaller than Asia, Europe and North America, it will continue to expand rapidly, with the value expected to double from $174 billion in 2024 to $378 billion in 2033, making it the fastest-growing region. “Construction industry growth in African countries will be driven by factors including strong population growth, accelerating urbanisation, commodity investment and government-backed industrialisation policies,” the report stated. The rapid growth of the continent's urban population from 629 million in 2024 to 763 million by 2030, before reaching 1.3 billion by 2050, will necessitate substantial investments in infrastructure and residential buildings. This growth, the report indicated, will lead to a higher need for electricity, transportation and building projects, meaning that nations must boost their infrastructure spending, especially by enlarging and linking current cities and towns, enhancing public-private partnerships (PPPs) and boosting the provision of urban energy and water. Countries with significant growth will include Algeria, Egypt, Nigeria, Tanzania, and Ethiopia while relatively small markets in Rwanda, Côte d'Ivoire, and Cameroon, will expand particularly fast. For Chimmy Ogbuebile, Business Development Director at MP Infrastructure, there is so much to do for infrastructure development in Africa as a fast-rising economies take on major projects but the issue remains access to finance. “The issue being that financing comes at high interest rate of 30 percent to 40 percent, he pointed out that multilateral banks should put in place instruments that facilitate private sector to access the needed financing.” According to the report, the forecasted growth from the 2020-2023 slowdown will not regain the rapid pace of the preceding decade due to global monetary conditions over 2024-2028 constraining capital flows to construction projects and overseas investment by firms in China will also slow as China's economic growth weakens. “The high government debt burden in many of Africa's economies, which was exacerbated by the pandemic, will also limit public investment in major construction projects,” it highlighted.

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Rwanda’s construction industry valued at $1.3bn in 2024 – report