Before we explore these 9 hot selling materials, it’s important that we take a quick look at the factors responsible for the growing demand for building and construction materials across Africa.
In addition to the explanation we’ll be giving shortly, we developed the ‘infograph’ below to give you an interesting snapshot of all these factors. It’s quite simple and we hope it’ll make a lot of sense to you.
- A fast growing population
Africa’s population has reached the one billion mark and is projected to exceed 2 billion by 2050. Our continent has the world’s highest birth and fertility rates which makes it the fastest growing population on the planet.
Shelter remains a basic need for millions of Africans who need a roof over their heads. Now and in the near future, there is (and will be) an explosive demand for housing.
This demand provides a lucrative potential to investors and entrepreneurs who are investing in residential buildings and real estate projects. Governments across the continent are also investing in public housing projects to reduce the deficit in many towns and cities.
This population-driven investment in real estate projects by both investors and governments is leading to a growing demand for all types building and construction materials.
- Favourable economic growth
The 2013 report by the African Development Bank, OECD, UNDP and ECA reveals that Sub-Saharan African economies are among the fastest growing in the world.
According to the report,
“Africa’s economic growth was 4.2 percent in 2012 and is projected to reach 4.5 percent in 2013, and further to 5.2 percent in 2014,”
Increased construction and building activity is usually one of the signs of positive economic growth. Governments have more money to invest in building and construction projects such as infrastructure (roads, bridges, dams etc) and basic housing.
In times of economic boom, more people have the financial power to invest in real estate or start building their personal houses. Because business is good in times of economic growth, companies expand their capacity by building new or larger warehouses and offices.
All of these building projects lead to a demand for building materials such as wood (timber), cement, sand, steel and several other hot-selling products which feed building and construction activities.
- Rapid urbanization
At the time of writing this article, more than 40 percent of Africa’s one billion people live in cities. This proportion is much higher than India’s 30 percent and comparable to China’s 45 percent.
At an average urban migration rate of 3.5 percent projected for the coming years, more than 400 million more Africans will become city people in the next 10 to 20 years.
The demand for basic shelter is concentrated in Africa’s urban areas. At the moment, just about 50 African cities have a population over 1 million. At the current rate of migration, the number of cities with over one million people will be over 65 by the year 2030.
Because more people are flocking to cities and towns in search of jobs and a better life, they are putting a lot of pressure on the inadequate accommodation available in urban areas. (source: Mckinsey Research).
Africa’s economic growth is also concentrated in the cities and is attracting a lot of local and foreign businesses. Both small and big businesses require office space and residential apartments for their local and expatriate workers.
As a result, private investors and entrepreneurs are getting involved in building projects and real estate developments that will supply the needed office and residential accommodation to these businesses.
- An expanding middle class
The African Development Bank describes the ‘middle class’ as people who spend between $2 to $20 a day. Currently, there are more than 300 million people on the continent who fit into this category.
A significant majority of Africans in the middle class hold salaried jobs or own a small business. Many of them have access to mortgage loans and are building their own properties and homes. A lot of them also invest in real estate projects and have become landlords.
According to a recent Deloitte report,
“Africa’s middle class has tripled over the last 30 years, with one in three people now considered to be living above the poverty line – but not among the wealthy. The current trend suggests that the African middle class will grow to 1.1 billion (42%) by the year 2060. As African economies are growing (7 of the 10 fastest growing in the world are African), the wealth is trickling down and Africa now has the fastest growing middle class in the world.”