Construction & Real Estate
From The Report: Ghana 2014
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Infrastructure development in Ghana has seen a healthy progression over the past decade, mainly as a result of the Jubilee oil field discovery in 2007. Demand for construction surged in 2011-12 as the government commenced various large-scale infrastructure projects. However, the sector is not without its various challenges. Following the oil discoveries, local financing was readily available. As revenue began to slow and, more recently, the value of the cedi slid, depreciating by 27% against the US dollar from January to July 2014, a number of local banks became reluctant to fund large-scale infrastructure projects, as turnover requires a long-term investment. The recently established Ghana Infrastructure Fund intends to facilitate private investment, with a new public-private partnership (PPP) infrastructure law expected to be passed in late 2014. Capital generated by Ghana’s energy-led aggressive growth from 2010 onwards has both helped attract high-end real estate offerings, largely funded by foreign investors, and stoke home-grown demand. Returns on commercial property are steady but the real growth opportunity lies in the provision of affordable housing to the urbanised middle-income earners.

This chapter contains interviews with David Adjaye, Principal, David Adjaye Associates; and David Morley, Partner and Head of Real Estate, Actis.

Articles from this Chapter

Overview

Improving access to finance and reducing building material costs remain priorities
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Infrastructure development in Ghana has seen a healthy progression over the past decade, mainly as a result of the Jubilee oil field discovery in 2007. Following Tullow Oil’s initial operations in 2010 demand for construction surged in 2011-12 as the government commenced various large-scale infrastructure projects. There was a particular focus on transport, housing and utilities, while private developers began to redefine Accra’s skyline. The recently established Ghana Infrastructure Fund intends…

Analysis

Cementing its position in the market
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As demand for utilities, housing and overall infrastructure in Ghana rises, new government projects and private developments require an ever-increasing supply of building materials, particularly cement. Local players are expanding production capacity while two new plants are set to begin operations in late 2014 and early 2015. Although challenges remain apparent, such as shipping costs and the rising incidence of cheap imports of Dangote’s Nigerian cement, which is undercutting local players, consumption…

Interview

Local knowledge: OBG talks to David Adjaye, Principal, David Adjaye Associates
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Interview:David Adjaye To what extent are new buildings in the region constructed in a sustainable manner? DAVID ADJAYE: We saw a long period of difficult political climates, which slowed research into best practice. So at present there is an explosion in the region that is without precedent. Government is adopting a handsoff stance to stimulate the private sector, so local authorities are almost at the whim of developers, who are coming in with models from outside the continent with little…

Overview

Access to credit and land administration reform can help the sector mature and consolidate the country’s wider growth story
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For many years the real estate market was an often-overlooked component of Ghana’s economy, failing to be as eye-catching to domestic and overseas investors as the better-known success stories in commodities, energy and agriculture. This is beginning to change, however, as capital generated by Ghana’s energy-led aggressive growth from 2010 onwards has both helped attract high-end real estate offerings, largely funded by foreign investors, and stoke home-grown demand. This is further complemented…

Interview

The long game: OBG talks to David Morley, Partner and Head of Real Estate, Actis
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Interview:David Morley How do you expect the interest in consumer-facing industries in sub-Saharan Africa to evolve? DAVID MORLEY: The consumer story in Africa has many years to run. Investors can access that through a broader range of sectors than those traditionally defined as consumer-facing. We invest primarily in six sectors through three investor products, of which real estate is one. There are consumer-driven aspects of real estate, particularly retail and residential, but it extends…