“A vibrant construction sector is an indisputable driver of GDP growth in a country,” said Bartholomew Armah, Director of Macroeconomics and Governance at the Economic Commission for Africa (ECA).
He was speaking during a ministerial webinar organized on 23 February to present African member States with the latest in a series of quarterly briefings to Ministers of Finance by the ECA Price Watch Centre for Africa, which focused on ‘Price Evolution in the Construction Sector.’
“Construction is a key lever in infrastructure development and plays a crucial role in an economy, providing essential structures including public and private infrastructure, and housing,” said Armah who also cited Ethiopia, Angola, and Tanzania as amongst the top countries where construction contributed significantly to GDP in 2019.
He noted, however, that the sector has been severely impacted by COVID-19, resulting in a 45% loss in economic activity in 2020.
In the same vein, the director of the Africa Centre for Statistics at the ECA, Oliver Chinganya deplored the fact that, “Construction prices have increased in many countries, threatening the affordability of decent housing, and becoming a heavy load for infrastructure development. This is triggered, largely, by the lockdown measures institutes by governments.”
According to the report, the average price increase in most African countries is higher than 3% annually. This could be attributed to a number of factors that vary from country to country such as exchange rate, high import taxes, and prices in other sectors.
Chinganya noted that with the halting of construction projects due to COVID-19, “construction workers have become jobless” thereby adding to existing burden of unemployment and poverty in many countries.
The report notes that construction grew more (over 5% yearly) in fastest growing economies such as Ethiopia, Mali, Djibouti, Rwanda, Côte d’Ivoire, Tanzania, Senegal, and Togo. Countries with more moderate growth such as Niger, Benin, Kenya, Uganda, Gambia, Guinea-Bissau, Egypt, Cabo Verde, DRC, Cameroon, and Madagascar also recorded strong annual growth of 3-5% in the construction industry.
The study recommends that countries should prioritize investments in the construction sector, given its potential to significantly drive economic growth without necessarily equating to inflation. Countries are also urged to develop infrastructure methods and materials that are environmentally friendly while prioritizing the use of local materials and green building practices.
Armah pointed out that, analyses for the Construction Price levels were done mainly with use of the “deflator of gross value added as an indication of price level.” This is because very few countries in Africa conduct comprehensive economic surveys or surveys on cost of building materials or construction.
In a media briefing held earlier on 22 February to present the report to the press, Chinganya made a clarion call for countries to invest in data collection. “Data is key. We cannot do this without the full collaboration of our member states,” he said.
The ECA Price Watch Centre for Africa is a reference on latest price developments on the continent, offering decision-makers in Africa a unique view of most recent price developments in country, sub-regional and at continental level, in support of short to medium-term economic governance, and long term sustainable development planning.
The next Price Watch discussion will focus on energy pricing. ECA has embarked on activities to fortify its collaboration with national statistics offices and research institutions to enhance data collection and analyses.
The construction pivot in Africa amid pandemic
Arbaminch crocodile ranch expands its sanctuary
Arba Minch Crocodile Ranch (AMCR) is set to expand its hub to a zoo by adding more animals including python snakes and civets.
The ranch that has been in service for over three decade was damaged by flood about 15 years ago and has since then relocated 7km from Arba Minch town, 444 km south of Addis Ababa in SNNP.
Wondimu Abate, Office Coordinator of AMCR, said that the facility mainly formed for conservation of the reptile is undertaking a study by the support of Arba Minch University to improve its service.
He said that currently the ranch is providing touristic services; however it was exporting the Nile crocodile skin almost two decades ago and has since then halted that operation.
Wondimu told Capital that the crocodile conservation center that was established 500 meter from the offshore of Lake Abaya relocated about 14 years ago and retreated 1.5 km to the land and 7 km from the town since the original location was smashed by the El Niño flood that occurred in 2007.
The current AMCR has eight hectares of land worth of compound and thus presents a potential to add further services.
Under the new initiative, python fences will be constructed, while, civet, fishery production centre, ostrich farm and aquarium will be established besides expanding the green area.
The ranch head said that the fishery production will have further support for the ranch that shall be a source of food for the crocodiles.
“Based on the new plan the ranch will be transformed to a zoo that will enable the facility to get more revenue by attracting more tourists,” he says, adding that, “It will help to keep the capacity to cover its cost by its self.”
“Currently, we have budget constrain to maintain our operation,” he explained. The ranch that has 35 permanent staff is administered by SNNP Culture, Tourism and Sport Bureau.
He said that the crocodile conservation center has 2, 600 at its stock that needs over a million birr to provide feeds, while salary is also the other cost, “In order to maintain our cost, we have been finalizing our business management plan for the coming year, which considered expanding further revenue sources.”
He explained that one of the tourist destinations in Arba Minch and the area is the ranch that shall generate more revenue if it improves its services.
According to the plan nongovernmental funding would be a potential for the new development.
The crocodile conservation center head said that the Hailemariam and Roman Foundation are working to support the endangered Netch Sar National Park that is located around the town of Arba Minch. The foundation has also promised to support the ranch on the initiative to add more touristic attractions at the conservation centre.
“If we have additional attraction, the tourist visiting time and number will increase that will help to improve the revenue stream,” Wondimu said.
In 1983 Ministry of Agriculture, under agreement with the Food and Agriculture Organization (FAO), established a crocodile management program based upon ranching, with a particular focus at Lake Chamo. As part of this program the government built, equipped, and staffed a crocodile farm at Arba Minch near Lake Chamo, on the shores of Lake Abaya. The first Nile crocodile hatching were introduced into the farm in 1985.
The conservation was established by the initiative of international crocodile researchers on the aim to mitigate the illegal killings of crocodiles globally. Meanwhile it was mainly formed for conversation it and had also been engaged in the crocodile skin business. Tourism is also another business for the hub.
Wondimu explained that COVID 19 had affected the revenue of AMCR, “Meanwhile AMCR was not affected on its skin sales because we have not been selling for over two decades now.”
“The information indicated that since 2000 the skin sale has been limited on research purpose and promotion. If we get a market we have over 3,600 crocodile’s skin at the stock, and we have 1,000 crocodiles available for slaughter,” he explained.
Crocodile that are three to four year of age are fully grown for slaughter and its skin is ready for market, “Feeding crocodiles more than four years of age is not feasible so we slaughter and stock the skin at Addis Ababa on Leather Industries Development Institute,” AMCR head explained and said that the ranch has a potential to supply up to 2,000 skin per annum if the market is available.
The skin market has degraded in the past couple decades which has impacted AMCR which was projected to sale up to 2,000 skins per annum as per the original plan of its formation and its price determined according to belly width. A centimeter of the skin might be tagged up to USD 5.
The skin trade should also be improved to generate revenue for the sector. He recommended the trading based on negotiation than the current bid scheme.
Wondium said that in the new study, there is a consideration to cooperate with the private sector to engage on the skin business. Under the new plan, private leather sector investors may be involved locally which will bring value addition besides assessing the market.
The reptile meat market on matters sales has not yet had progress however there are negotiations with some foreign buyers but it is not yet sealed.
Naturing the tech ecosytem
GIZ, Orange, the Ministry of Innovation and Technology, The Ethiopian Investment Commission, and the Industrial Parks Development Corporation are launching an ecosystem that is specifically targeted to improve digital skills and innovation called the Addis Ababa Orange Digital Center. It was officially launched on February 25th in the presence of Abraham Belay, Minister of Innovation and Technolgy, Lelise Neme, Commissioner of the Ethiopian Investment Commission, Sandokan Debebe, CEO at Industrial Parks Development Corporation, Alioune Ndiaye, C.E.O of Orange Middle East & Africa, Peter Palesch, GIZ Country Director, Stephan Auer, German Ambassador in Ethiopia and Remi Marechau, French Ambassador in Ethiopia.
Ethiopia is set to be the third Orange Digital Center in Africa and will reside on a 500-meter square vicinity. It will have the purpose of bringing together several strategic programs under the same roof. It will consist of a coding school, a “FabLab Solidaire”, a startup accelerator “Orange Fab” and Orange Ventures Africa which is the Group’s investment fund.
Orange, with the support of GIZ, aids East Africa’s digital ecosystem by providing young Ethiopians with all its technological know-how to create more job opportunities. Orange Digital Center offers free programs that include training for young people in new technologies, supporting entrepreneurs, accelerating startups, and investing in them.
The partnership between GIZ and Orange includes 14 countries; Ethiopia, Burkina Faso, Cameroon, Egypt, Guinea, Ivory Coast, Jordan, Liberia, Madagascar, Mali, Morocco, Senegal, Sierra Leone, and events.
“Building the ‘Digital and Innovation Ecosystem’ is a multi-stakeholder agenda that requires holistic policy envisioning, vibrant enabling system, and innovative and efficient collaboration among stakeholders like this “Responsible” move of Orange and parties involved; I must acknowledge and encourage, indeed it is an initiative worth investing on,” expressed Abraham Belay, Minister of Innovation & Technology.
Sandkokan Debebe, CEO at Industrial Parks Development Corporation also added, “We believe that the skills that will be developed here will be very precious to support the IPDC’s goal of making ICT park as a central hub to Africa, place of technological knowledge transfer, an opportunity for IT base job creations and a base for country’s progress toward becoming the middle-income economy.”
