Business Opportunities in SADC 14 March 2019 Mr Pumelele Qongqo cidb

Overview Background African Construction Markets Funding and Projects Business Environment: Challenges and constraints Summary and Conclusion

Background

Background Export Promotion of Contracting Services; A Feasibility Study Difficult economic conditions Pace and depth of transformation

African Construction Markets

African Construction Markets

African Construction Markets 60% of the world's uncultivated arable land Africa is the world’s second largest continent 25% of the global workforce Africa has a $3.3 trillion economy Annual GDP growth of 6% or more Six of the top ten fastest growing economies Construction in Africa amounts to below 10%

African Construction Markets Top sectors in African infrastructure development (rated by investment value) are: energy and power transport, mining, real estate and water, followed by oil and gas

Infrastructure Investment Southern Africa is largest market: including South Africa Followed by East and West Africa 21% 7% 5% 29% 38%

Minerals Rich in minerals such as bauxite, cobalt, industrial diamond, phosphate rock, platinum, vermiculite, zirconium and gold

Transport Networks Access to, and commercialisation of, these natural resources is a key driver of infrastructure development in Africa

Funding and projects

Demand $93 billion per year $39 billion per year: Sub-Saharan Africa 50% financed $39 billion per year: Sub-Saharan Africa capital expenditure: $22 billion operation and maintenance: $17 billion

Funding 36% projects of over $50m is provided by Development Finance Institutions (DFIs): International DFIs: 16% Africa DFIs: 13% DFI co-funding: 7% Domestic governments fund just 8% of projects: investing $17,4 billion

South Africa inc.

Built Environment Professions Export Council (BEPEC) Show me the Money \ Projects Workshops Facilitate business opportunities for members Strengthen the relationship with the dti and other governments, ensuring alignment Build key strategic relationships in line with the North South Corridor

the dti \ Trade Invest Africa July 2016 Government to government negotiations Unlocking of participation along the North South Corridor Outward Selling Missions

Development Bank of Southern Africa

Africa House Projects (i) Roads on either side of the Kazungula Bridge, which are in disrepair and acting as bottlenecks for the development of smooth flowing trade between South Africa and the DRC’s Copperbelt; Dams and a water transfer pipeline and pump stations from the Zambezi to Pandamatenga and eventually to link into the existing water pipeline that feeds Gaborone and Lobatse;

Africa House Projects (ii) A possible PPP in the rail sector for 262km of rail on the Botswana side and also a 22km project on the Zambian side; A power transmission line to link to Pandamatenga; A fair amount of commercial property development in Kasane and surrounds as the town grows in importance and stature;

Summary Growing economies Infrastructure deficit Market access Market intelligence

CHALlENGES and Constraints Contractors

Challenges and Constraints Political factors: political uncertainty or insufficient confidence in the political system, and excessive local content regulations Administrative factors: red tape, corruption, administrative delays Economic factors: unfavourable exchange rates and currency Social factors: infrastructure problems and threats of terrorism/crime rate Legal factors: inefficient legal systems or regulatory requirements

Challenges and Constraints Success depends on market focus, position, risk management, and the capabilities of the enterprise: many contractors do not yet possess the necessary capabilities

Summary and conclusions

Summary and Conclusions Many opportunities Market intelligence Funding is a challenge Government initiatives (TIA)

Thank you