REPORT

Kenya at fourth position in attracting foreign contractors to Africa

Chinese companies accounts for the highest share of revenue generated by the top international construction firms in the region

In Summary
  • The report by Centum Real Estate shows Kenya has around 65 foreign contractors
  • According to the report, construction industry growth in Kenya and Ethiopia has been too slow while Rwanda has been on the boom.
MEN AT WORK: A section of Southern Bypass close to where it would cut through the Nairobi National Park.Photo/Charles Kimani
MEN AT WORK: A section of Southern Bypass close to where it would cut through the Nairobi National Park.Photo/Charles Kimani

Kenya ranks fourth in attracting global contractors in Africa, after South Africa, Ethiopia and Nigeria latest research by Centum Real Estate shows.

Foreign contractors number about 65 in the country according to the research, with 15 different nationalities involved.

Chinese and European companies accounted for the highest share of revenue generated by the top international construction companies in the region, at 45 per cent and 32 per cent, respectively, while U.S. companies accounted for only five per cent. 

According to the report, construction industry growth in Kenya and Ethiopia has been too slow while Rwanda has been on the boom.

However, it points out that there are scalability constraints in Rwanda’s construction markets even though it forecasts Year-on-Year growth of above 10 per cent for Rwanda between 2020-2029.

The report projects slowing annual growth for both Kenya and Ethiopia’s construction industries during the same period, with the Kenyan case attributed to financial constraints and base effects.

Nine Chinese firms dominate the top 10 list of contractors in the continent, with Sinohydro Corporation, China Civil Engineering Construction Corporation (CCECC) and China Henan International Cooperation Group Company Limited commanding the top three positions.

Others are China Communications Construction Company (CCCC), China Harbour Engineering Company (CHEC), China Road and Bridge Corporation, Mota-Engil China and Geo-Engineering Corporation (CGC).

France’s SOGEA-SATOM also made to the top 10 list at position seven.

According to the Wealth Report by Knight Frank released earlier this year, the importation of new forms of building technology into the continent by the Chinese has resulted in greater efficiency for building and construction.

 

''With higher efficiency comes a reduction in costs. In effect, local contractors and those from other regions have been forced to play catch-up,’’ the report said.

In recent times, construction companies from other countries have taken note of the massive opportunities the Chinese have been enjoying, and have launched their own initiatives to claim a piece of the cake.

For instance, the US construction company Bechtel’s multi-million dollar deal with the Kenyan government to construct a toll road from Nairobi to Mombasa.

French firm Vinci is also expected to undertake Sh160 billion construction of a toll highway from Nairobi to Mau Summit.

The deal, which was signed on during President Kenyatta’s visit to France, will enter into force next year after the completion of an environmental and social impact study.

The financial closing of the project for the 233 kilometres will take place by the end of 2021.