In the face of unprecedented global challenges, African economies are demonstrating remarkable resilience, with projected growth rates anticipated to surpass the global average.
According to the recently released 35th edition of the “Africa Cost Guide: Property & Construction 2024/25” by AECOM, Africa’s economies were set to grow by 3.7% in 2024, followed by 4.3% in 2025.
While this progress is promising, various obstacles, including infrastructure deficits, the effects of climate change, and sociopolitical issues, pose significant hurdles for sustained long-term growth.
Michell Bezuidenhout, the newly appointed PCC director at AECOM, affirmed that South Africa remains a leading destination for investment despite facing lower growth rates.
“The public and private sectors can enhance this perception by improving transparency, governance, and investing in critical infrastructure projects,” she stated.
The Africa Cost Guide, which serves a broad audience in the built environment, has garnered endorsement from key associations such as the Association of South African Quantity Surveyors (ASAQS).
Dr. Gerhard Brümmer, the principal author of the guide, highlighted its significance.
“The guide is a testament to AECOM’s dedication to excellence, encapsulating the essence of our relentless pursuit of progress,” Brümmer said.
Niel du Pisani, associate director of cost management in Africa, added, “We have clients asking when the new guide will be available, as they keep it handy for reference. It has become an important resource for key industry players.”
The report stresses the necessity for a holistic approach to infrastructure development in South Africa, one that not only considers economic factors but also prioritises social values such as health, quality of life, and inclusivity.
This aligns with AECOM’s ‘Think and Act Globally’ strategy, which combines global expertise and digital innovation with locally tailored solutions aimed at tackling local challenges including unemployment, public health crises, and infrastructure shortcomings.
The guide also highlights key trends shaping the construction landscape in Africa, particularly the increasing demand for Purpose-Built Student Accommodation (PBSA), exemplified by the Cape Station project in Cape Town.
Additionally, the ongoing digital transformation within the construction sector through cutting-edge technologies like 5D BIM is enhancing cost management while improving overall project outcomes. The emphasis on environmental, social, and governance (ESG) criteria is becoming paramount, alongside the rise of public-private partnerships to fund large-scale developments.
Africa is emerging as a global investment hotspot as countries seek to diversify their economies amid a focus on decarbonisation, energy transitions, and infrastructure improvements. The continent possesses a significant share of the world’s natural resources, including cobalt, diamonds, and platinum—elements vital for industries striving to adopt greener practices.
Increasing investments in renewable energy underscore Africa's vast potential, capturing the attention of foreign investors driven by sustainable initiatives. This momentum is set to attract financial support from rising markets, particularly from players in China, India, and the UAE. “Foreign investment is growing, and we need to tap into those opportunities,” remarked du Pisani, recognising Africa as a burgeoning hub for renewable energy investment.
Despite building inflation hovering between 5% and 6% annually—an issue that clients typically manage adeptly—financing remains a concern especially for smaller enterprises. “Our main clients do not face issues accessing funds, but smaller companies might struggle,” du Pisani explained. Maintaining the demand for cost-effective solutions is critical, with a priority on finding equilibrium between construction expenditures and operational efficiency.
“The Africa Cost Guide not only enhances AECOM’s value proposition but also benefits clients navigating the complexities of modern development,” du Pisani emphasised. As the construction sector continues to evolve, the integration of sustainability and value engineering will be vital in shaping a resilient future.
Bezuidenhout encapsulated AECOM's commitment to the market, stating, “Despite local and international challenges, we are dedicated to delivering value-driven, sustainable solutions to meet evolving client demands. We leverage our global expertise, digital tools, and adaptability to navigate complex projects during these uncertain times.”
BUSINESS REPORT