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    • Construction Industry Ethiopia

    The Construction Industry in Ethiopia 2022

    Charles Chinya | Ethiopia | 29 September 2022

    The Construction Industry in Ethiopia 2018

    Carole Veitch | Ethiopia | 30 January 2018

    The Construction Industry in Ethiopia 2015

    Martin Rothschild | Ethiopia | 18 September 2015

    The Construction Industry in Ethiopia 2015

    Martin Rothschild | Ethiopia | 24 March 2015

    The Construction Industry in Ethiopia 2014

    Martin Rothschild | Ethiopia | 09 September 2014

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report focuses on Ethiopia’s construction industry and infrastructure development and includes transport infrastructure, road construction, energy projects, real estate and industrial parks. It includes country information, major projects and developments. There are profiles of 23 companies including international players such as China Civil Engineering Construction Corporation and China Railway and local companies such as Midroc, Afro-Tsion, Sunshine and Sur Construction.

    Introduction

    • This report focuses on the construction industry and infrastructure development in Ethiopia, which includes transport infrastructure, road construction, railway, sewage and energy projects, real estate and industrial parks. \r\n
    • Small and medium construction companies operate in the informal market and local and foreign companies operate in the formal market. \r\n
    • The involvement of foreign companies is dominated by Chinese companies, which are undertaking large projects. \r\n
    • The construction market is projected to grow at an annual average growth rate of more than 8% from 2023 to 2026. \r\n
    • The country’s 10-year development plan touches all aspects of development, including infrastructure development and the objective of public-private partnerships.

    Strengths

    • 10-year development plan from 2020-2030 which priorities infrastructure development.
    • A young workforce of more than 45 million people.
    • Competitive incentives packages for investors (tax exemptions).
    • Government’s continuous high budget allocation to infrastructure development.
    • High economic growth rates.
    • High foreign direct investment compared to regional peers.
    • Large and growing population predicted to reach 145 million in 2030.

    Weaknesses

    • Delays in construction industry development policy implementation.
    • Difficulties sourcing the right materials locally.
    • Foreign currency shortages.
    • Frequent power outages and water supply interruptions.
    • High levels of corruption.
    • Limited access to credit.
    • Poor safety precautions on construction sites, safety regulations are commonly flouted and poor enforcement by authorities.
    • Poor transport infrastructure leading to delays in delivering times and high costs.
    • Research and development activity is low and little innovation.
    • Shortage of skilled labour.

    Opportunities

    • High demand for modern retail and commercial facilities.
    • Opportunities for cement and steel manufacturing to meet local demand.
    • Public-private partnership policies giving opportunities for private investors to invest in public infrastructure development.
    • Rapid urbanisation.
    • Rising demand for low-cost social housing.
    • Trade zones and industrial parks that offer investment incentives.

    Threats

    • Climate change and increasing risk of drought.
    • Delays in Implementation of infrastructure projects.
    • Potential security conflicts among regional states, and or government and regional states.
    • Risk and potential for high debts on industry players.

    Outlook

    • Much of Ethiopia’s growth in 2023 is expected to come from infrastructure development, a tourism rebound and liberalisation of the telecoms sector.\r\n
    • A focus of the 10-year growth plan is rapid urban development that will involve housing development and inclusion of the private sector in infrastructure development and service provision. \r\n
    • The government is also focusing on public-private partnerships for infrastructure development which will offer opportunities, as the country plans to address the infrastructural deficit and public services delivery gaps. \r\n
    • The outlook for Ethiopia’s construction industry looks positive in the short to medium term. \r\n
    • However, key downside risks include the ongoing security conflict in Tigray and company debt vulnerabilities.

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    The Construction Industry in Ethiopia
    The Construction Industry in Ethiopia 2022

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    The Construction Industry in Ethiopia 2015-09-18

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    The Construction Industry in Ethiopia 2015-03-24

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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. COUNTRY INFORMATION 1
    3. DESCRIPTION OF THE INDUSTRY 4
    3.1. Industry Value Chain 6
    3.2. Geographic Position 8
    3.3. Size of the Industry 9
    3.4. Key Success Factors and Pain Points 11
    4. LOCAL 12
    4.1. State of the Industry 12
    4.2. Key Trends 17
    4.3. Trade 18
    4.4. Corporate Actions 21
    4.5. Regulations 21
    4.6. Enterprise Development and Social Economic Development 23
    5. AFRICA 23
    6. INTERNATIONAL 27
    7. INFLUENCING FACTORS 32
    7.1. Security Threats 32
    7.2. Foreign Direct Investment (FDI) 33
    7.3. Urbanisation 34
    7.4. COVID-19 34
    7.5. Economic Environment 34
    7.6. Public Private Partnerships (PPPs) 35
    7.7. Corruption 35
    7.8. Health and Safety 36
    7.9. Labour 36
    7.10. Environmental Issues 37
    7.11. Technology, Research and Development (R&D) and Innovation 38
    7.12. Government Support 39
    7.13. Input Costs 39
    8. COMPETITIVE ENVIRONMENT 40
    8.1. Competition 40
    8.2. Barriers to Entry 40
    9. SWOT ANALYSIS 41
    10. OUTLOOK 42
    11. INDUSTRY ASSOCIATIONS 42
    12. REFERENCES 43
    12.1. Publications 43
    12.2. Websites 44
    COMPANY PROFILES 49
    Afro-Tsion Construction PLC 49
    Alemayehu Ketema General Contractor 51
    ASER Construction PLC 53
    BamaCon Engineering PLC 55
    BEAEKA General Business PLC 57
    China Civil Engineering Construction Corporation 59
    China Railway Group Ltd 61
    DMC Construction PLC 67
    Dugda Construction PLC 68
    Elmi Olindo & Co PLC 70
    Flintstone Engineering 72
    Gutema Firisa Construction PLC 74
    MIDROC Construction Ethiopia PLC 76
    Nasew Construction PLC 78
    OVID Construction PLC 80
    Rama Construction PLC 82
    SABA Engineering PLC 84
    Sunshine Construction Pvt Ltd 85
    Sur Construction PLC 87
    Tesfaye Legesse Construction 89
    Waliif Construction S.C 90
    Yirgalem Construction PLC 92
    YOTEK Construction PLC 94

    Introduction

    This report examines the construction industry and infrastructure development in Africa’s second most populous country, the Federal Democratic Republic of Ethiopia. The sector underpins Ethiopia’s Vision 2025, which envisages the attainment of lower-middle income status by 2025. During the past decade robust public and private expenditure on infrastructure and other construction works has served as a catalyst for Ethiopia’s rapid economic development. The Horn of Africa nation has emerged as one of the fastest-growing economies in the world, recently overtaking Kenya to become the largest economy in East Africa. With a projected economic growth rate of 8.3% for 2017, the World Bank forecasts that Ethiopia is poised to become Africa’s most expansive economy.

    Strengths

    • Ethiopia’s construction industry serves all sectors of the economy. The industry is a key driver of socio-economic development, providing shelter, basic services, transport networks and other infrastructure.
    • Ethiopia’s Second Growth and Transformation Plan prioritises infrastructure development.
    • The construction sector is labour-intensive and creates multiple employment opportunities.
    • The country is attracting high levels of FDI
    • The government continues to invest heavily in infrastructure projects

    Weaknesses

    • Ethiopia is technologically “traditional”. R&D activity is limited and there is little innovation in the construction sector.
    • It is frequently difficult to procure construction materials and equipment locally and contractors are highly reliant on imported goods.
    • The operating environment is characterised by bureaucratic inefficiencies and corruption. Rule of law is weak.
    • There is a shortage of skilled labour, workmanship is generally poor and productivity is low.

    Opportunities

    • Market demand for low-cost, energy-efficient housing, creates opportunities for new innovations and product lines.
    • Rising urbanisation presents building and construction opportunities.
    • The emerging middle class is driving demand across a multitude of sectors.
    • The industrialisation of the Ethiopian economy presents many new opportunities for contractors.
    • With the implementation of the Paris Agreement on Climate Change and the 2030 Agenda for Sustainable Development, renewable energy projects are expected to attract greater investment.

    Threats

    • Corruption and tender fraud.
    • External geopolitical threats and global macroeconomic pressures, which could result in lower levels of investment.
    • Funding shortfalls and delays in the implementation of infrastructure projects.
    • The resurgence of internal political hostilities and the resurgence of regional security threats

    Outlook

    Despite the latent potential of the “African Lion”, doing business in the de facto one-party state remains challenging for construction companies. Commenting on the World Bank’s strategic plan for Ethiopia for the period 2018 to 2022, World Bank Country Director Carolyn Turk said, “Ethiopia’s success in achieving structural and economic transformation will depend on sustaining the economic growth rates of the past decade by boosting productivity and competitiveness and finding sustainable solutions for infrastructure financing as the primary focus.” The World Bank Country Partnership Framework, which is aligned with Ethiopia’s Second Growth and Transformation Plan, seeks to support the country in its quest to achieve lower middle-income status by the year 2025. The involvement of the World Bank and other international institutions in the evolution of Ethiopia’s economic environment has been largely well received by the construction sector whose growth is inextricably linked to the country’s economic development.\r\n\r\nThe lifting of the nationwide State of Emergency in August 2017, coupled with the commitment of Ethiopia’s government to a process of reform, has reignited investor confidence in the rapidly expanding East African nation. Prime Minister Hailemariam Desalegn’s new stance is widely expected to impact positively on the order books of the country’s construction contractors. However, while political tensions appear to have eased, some commentators caution that businesses operating in Oromia Region remain highly exposed to a resurgence of protest action and ethnic violence. In December 2017 an outbreak of violence in the region claimed the lives of more than 60 people. Political analysts warn that Ethiopia’s development ambitions could be derailed if the government fails to address the fundamentally undemocratic nature of the country’s political system.

    The Construction Industry in Ethiopia
    The Construction Industry in Ethiopia 2018

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    Industry Landscape

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    The Construction Industry in Ethiopia 2022-09-29

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    The Construction Industry in Ethiopia 2015-09-18

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    The Construction Industry in Ethiopia 2015-03-24

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    The Construction Industry in Ethiopia 2014-09-09

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. COUNTRY INFORMATION 1
    2.1. Geographic Position 2
    3. DESCRIPTION OF THE INDUSTRY 5
    3.1. Industry Value Chain 6
    4. SIZE OF THE INDUSTRY 8
    5. STATE OF THE INDUSTRY 12
    5.1. Local 12
    5.1.1. Corporate Actions 21
    5.1.2. Regulations and Government Policies 21
    5.2. Continental 24
    5.3. International 27
    6. INFLUENCING FACTORS 30
    6.1. Economic Environment 30
    6.2. Investment in Infrastructure 30
    6.3. Urbanisation 32
    6.4. Local Content 33
    6.5. Corruption 33
    6.6. Input Costs 34
    6.7. Cyclicality 34
    6.8. Health and Safety Concerns 34
    6.9. Technology, Research and Development (R&D) and Innovation 35
    6.10. Labour 37
    6.11. Environmental Concerns 38
    7. COMPETITION 39
    7.1. Barriers to Entry 40
    7.2. Public Procurement and the Tendering Process 41
    8. SWOT ANALYSIS 41
    9. OUTLOOK 42
    10. INDUSTRY ASSOCIATIONS 43
    11. REFERENCES 44
    11.1. Publications 44
    11.2. Websites 45
    COMPANY PROFILES 47
    AFRO-TSION CONSTRUCTION PLC 47
    ALEMAYEHU KETEMA GENERAL CONTRACTOR 49
    CHINA CIVIL ENGINEERING CONSTRUCTION CORPORATION 51
    CHINA COMMUNICATIONS CONSTRUCTION COMPANY LTD 53
    CHINA RAILWAY GROUP LTD 58
    CHINA ROAD & BRIDGE CORPORATION 63
    CONSOLIDATED CONTRACTORS COMPANY 65
    DMC CONSTRUCTION PLC 68
    ETHIOPIAN CONSTRUCTION WORKS CORPORATION 69
    FLINTSTONE ENGINEERING 70
    HABESHA CONSTRUCTION MATERIALS AND DEVELOPMENT SC 73
    HELA CONSTRUCTION PLC 75
    MIDROC ETHIOPIA PLC 76
    MIDROC FOUNDATION SPECIALIST PLC 78
    RAMA CONSTRUCTION PLC 80
    SUNSHINE CONSTRUCTION PVT LTD 82
    SUR CONSTRUCTION PLC 84
    TEKLEBERHAN AMBAYE CONSTRUCTION PLC 86
    UNIVERSAL CONSTRUCTION PVT LTD 88

    Report Coverage

    This report on the construction industry in Ethiopia focuses on conditions in the local sector as well as market opportunities for companies in all the sectors of the economy. It investigates government initiatives as well as recent developments and factors influencing the success of the sector. The report also profiles 14 foreign and local construction companies, ranging from global giant, state-owned China Road & Bridge Corporation (CRBC) which employs 1,500 people in Ethiopia alone, to local micro-enterprise, Alemayehu Ketema General Contractor t/a AKGC, which focuses on the construction of road and waterworks and has seven permanent employees.

    Introduction

    The Ethiopian construction industry is benefitting from the massive levels of growth the country has experienced over the last decade. The industry has transformed into an economy-driving industry, with an array of projects pushing the growth of construction higher than that of economic growth. Ethiopia has also benefitted from positive trade relations with China. Chinese contractors have also helped local Ethiopian firms by training them, bringing them in to assist on large-scale projects, and showing them how to manage projects effectively. However, the construction industry is faced with harsh geographic conditions, a lack of available resources, a lack of decent social conditions for the majority of Ethiopians, and its location in relation to tense political situations. Despite these challenges, the industry continues to expand, and with the 2nd phase of the government’s Growth and Transformation Plan (GTP II) taking effect, growth looks set to continue.

    Strengths

    • Considerable resource base.
    • Excellent financial and political relations with the World Bank Group.
    • Government’s fiscal policies.
    • Improving regulatory and governance conditions.
    • Input costs are reasonably low.
    • Real annual growth rate of over 10% per year for the last ten years.
    • Relatively cheap supply of electricity.
    • Strong relationships with China and Chinese construction firms.
    • Sufficient supply of cement.

    Weaknesses

    • Capacity constraints.
    • Inefficient permit control.
    • Lack of coordination between important Construction oversight bodies.
    • Lack of highly skilled manpower in construction.
    • Perception of poor quality of the final product.
    • Poor international trade policy.
    • Poor regulatory environment makes it difficult for private sector investment to occur.
    • Poorly developed communications and technology network.
    • The lack of access to modern technologies and the lack of understanding of how to use these technologies.
    • The non-application of proper building regulations and standards.

    Opportunities

    • Desire to achieve Millennium Development Goals will lead to more construction projects.
    • Excellent resources for renewable energy projects.
    • Expected increase of electricity being added to the grid.
    • Global investment community starting to take notice of Ethiopia.
    • Government backed Growth and Transformation Plan (GTP) seeks to grow the economy significantly in the short- to medium-term.
    • High rate of urbanisation will present construction opportunities.
    • Huge construction industry growth expected by government.
    • Massive skyscraper projects are planned.
    • Significant emphasis on countrywide infrastructure development.
    • Significantly reduced inflation rates make financing new projects cheaper.

    Threats

    • Corrupt government activities lead to inefficiencies.
    • High prevalence of HIV/AIDS related deaths.
    • Lack of basic human freedoms of association and speech.
    • Possibility of increasing border security tension.
    • Possible tension with Egypt over the Grand Renaissance Dam.
    • Tense political situation.
    • Threat of terrorist activity from surrounding countries.
    • Widespread poverty.

    Outlook

    Construction Industry Forecast \r\nThe Ethiopian construction industry is expected to drive growth in the country with government investing 10% of GDP in the industry each year for the next decade. The expected contribution of the construction industry to GDP is 7.6% in 2015 but this is expected to rise as investment continues to come into the country and the government continues to heavily invest in infrastructure development. The contribution to GDP will increase on the back of massive infrastructure projects, as well as significantly large commercial and tourism construction in Addis Ababa. The massive strides taken by the country to produce its own cement will support the construction industry over the short- to medium-term. The focus on power generation in the country will also help sustain economic growth and allow the construction industry to undertake massive projects and use state-of-the-art equipment. Railway developments are continuing at a steady pace and the Djibouti-Ethiopia railway line will start operations in 2016. \r\n\r\nMacroeconomic Outlook\r\nAnders Heede, the CEO of BDO for Europe, the Middle East, and Africa, expects Ethiopia to be one of the best investments going forward in the medium term for international investors. The economy is currently the 12th fastest growing economy in the world and has shown growth of over 10% consistently over the last decade. Ethiopia is also Africa’s fastest-growing non-oil economy. It is viewed as stable and reliable because the government has delivered on its five year GTP which has seen massive investments in infrastructure projects. The economy of Ethiopia has also been diversified and is not solely reliable on agriculture or natural resources to sustain it, making it an attractive investment going forward. Heede believes that Ethiopia has all the right basics for an emerging market economy and that it will not be badly affected by the recovery of some developed economies. As long as there are no major events to disturb the current course the country seems to be on, Heede recommends Ethiopia as a safe and valuable long-term investment option.\r\n\r\nPolitical Outlook\r\nWhile analysts and locals still question the state of basic human rights regarding communications and association in Ethiopia, the government is attempting to improve foreign perspective on the country. Some analysts state that Ethiopia’s relationships with Eastern powers will have a ‘trickle-down’ effect and allow them to gain more credibility with Western countries. Others state that the inherent distrust of these powers will deter Western interest. The 2015 election saw the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) win by a landslide in the national elections, stripping the official opposition of its one parliamentary seat and taking all 546 seats in the house. The EPRDF also won all but 21 of the 1,987 regional council seats. The party has been in power since the fall of the Derg regime in 1991, and oversaw a seamless and non-violent transfer of power after the death of Meles Zenawi after 21 years in power. The future international relations of the country received a boost as Barack Obama became the first sitting American president to visit Ethiopia. The close proximity of Ethiopia to Somalia, which has a high presence of al-Shabaab members, is a worry going forward, as is the possible consequences of the close security cooperation with the United States. The United States also stated that it was still “deeply concerned by continued restrictions on civil society, media, opposition parties, and independent voices and views” in the country. In general international analysts are cautious but optimistic about the political future of Ethiopia.

    Read More..
    The Construction Industry in Ethiopia
    The Construction Industry in Ethiopia 2015

    Full Report

    R 1 900.00(ZAR) estimated $104.88 (USD)*

    Buy Now +

    Industry Landscape

    R 1 330.00(ZAR) estimated $ 73.42 (USD)*

    Buy Now +

    Historical Reports

    The Construction Industry in Ethiopia 2022-09-29

    R 6 500.00(ZAR) estimated $358.81 (USD)*

    View Report Add to Cart

    The Construction Industry in Ethiopia 2018-01-30

    R 1 900.00(ZAR) estimated $104.88 (USD)*

    View Report Add to Cart

    The Construction Industry in Ethiopia 2015-03-24

    R 1 900.00(ZAR) estimated $104.88 (USD)*

    View Report Add to Cart

    The Construction Industry in Ethiopia 2014-09-09

    R 1 900.00(ZAR) estimated $104.88 (USD)*

    View Report Add to Cart

    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. SIZE AND STRUCTURE OF THE INDUSTRY 1
    2.1. Geographic Position 1
    2.2. Key Cities and Regions 2
    2.3. Size of the Industry 3
    2.3.1. Key Indigenous and Foreign Players 3
    3. STATE OF THE INDUSTRY 8
    3.1. Local 8
    3.1.1. Corporate Actions 9
    3.1.2. Regulations 10
    3.1.3. Market Opportunities and Challenges per Sector 11
    3.1.3.1. Transport 12
    3.1.3.2. Energy/Power 15
    3.1.3.3. Water Supply and Treatment 18
    3.1.3.4. Healthcare 20
    3.1.3.5. Education 22
    3.1.3.6. Telecommunications 23
    3.1.3.7. Residential Building 24
    3.1.3.8. Commercial 25
    3.1.3.9. Retail 26
    3.1.3.10. Hotels and Tourism 27
    3.1.3.11. Mining and Industrial 27
    3.2. Continental 31
    3.3. International 35
    4. INFLUENCING FACTORS 37
    4.1. Economic Environment 37
    4.1.1. Effects on the Construction Sector 38
    4.2. Socio-Political Environment 39
    4.3. Infrastructure Deficit 41
    4.3.1. Government Infrastructure Programme Spend 41
    4.3.2. Foreign Direct Investment (FDI) 41
    4.3.3. Private Sector Investment 41
    4.4. Urbanisation 42
    4.5. Local Content 43
    4.6. Corruption 43
    4.7. Industry Supply Chain 44
    4.7.1. Capacity, Quality and Security of Supply 44
    4.8. Industry Specific Issues 45
    4.8.1. General Trends 45
    4.8.2. Input Costs 46
    4.8.3. Cyclicality 46
    4.8.4. Health and Safety 47
    4.9. COMPETITION 47
    4.9.1. Barriers to Entry 47
    4.9.2. Public Procurement and the Tendering Process 48
    4.10. Labour Resources 48
    4.10.1. Training and Skills Development 48
    4.10.2. Licensing 49
    4.10.3. Skills Shortages 49
    4.10.4. Opportunities for Foreign Professionals 50
    4.10.5. Technology, Research and Development (R&D) and Innovation 50
    4.11. Environmental Concerns 51
    5. SWOT ANALYSIS 52
    6. OUTLOOK 54
    6.1. Construction Industry Forecast 54
    6.2. Macroeconomic Outlook 54
    6.3. Political Outlook 54
    7. INDUSTRY ASSOCIATIONS 55
    8. REFERENCES 56
    8.1. Publications 56
    8.2. Websites 56
    COMPANY PROFILES 58
    AFRO-TSION CONSTRUCTION PLC 58
    ALEMAYEHU KETEMA GENERAL CONTRACTOR 60
    CAMPBELL PROJECT MANAGEMENT SERVICES (ETHIOPIA) PLC 62
    CHINA ROAD & BRIDGE CORPORATION 64
    CONSOLIDATED CONTRACTORS COMPANY 66
    FLINTSTONE ENGINEERING 69
    HABESHA CONSTRUCTION MATERIALS & DEVELOPMENT SC 72
    HELA CONSTRUCTION PLC 74
    RAMA CONSTRUCTION PLC 76
    SUNSHINE CONSTRUCTION PVT LTD 78
    SUR CONSTRUCTION PLC 80
    TEKLEBERHAN AMBAYE CONSTRUCTION PLC 83
    UNIVERSAL CONSTRUCTION PVT LTD 85

    Introduction

    Ethiopia’s Growth and Transformation Plan (GTP) is entering the final year of its first phase and the impact so far has been overwhelmingly positive. Significant progress has been made on the construction of road, rail, and power services across the country although the rugged terrain poses a challenge to contractors. Another significant challenge is the proliferation of Chinese firms in the Ethiopian construction space as the government perceives local contractors as untrustworthy and insufficiently skilled to handle mega infrastructure projects. The increased positive international image of Ethiopia and the potential for expansion in the country has had and will continue to have a positive effect on the construction industry. All factors surrounding the Ethiopian construction industry, including the socio-economic, political, opportunities, and threats, will be investigated and presented below, as well as relevant updates detailing important changes in the last nine months.

    Strengths

    • Considerable resource base.
    • Excellent financial and political relations with the World Bank Group.
    • Government’s fiscal policies.
    • Improving regulatory and governance conditions.
    • Input costs are reasonably low.
    • Real annual growth rate of over 10% per year for the last ten years.
    • Relatively cheap supply of electricity.
    • Strong relationships with China and Chinese construction firms.
    • Sufficient supply of cement.

    Weaknesses

    • Capacity constraints.
    • Inefficient permit control.
    • Lack of coordination between important Construction oversight bodies.
    • Lack of highly skilled manpower in construction.
    • Perception of poor quality of the final product.
    • Poor international trade policy.
    • Poor regulatory environment makes it difficult for private sector investment to occur.
    • Poorly developed communications and technology network.
    • The lack of access to modern technologies and the lack of understanding of how to use these technologies.
    • The non-application of proper building regulations and standards.

    Opportunities

    • Desire to achieve Millennium Development Goals will lead to more construction projects.
    • Expected increase of electricity being added to the grid.
    • Global investment community starting to take notice of Ethiopia.
    • Government-backed Growth and Transformation Plan (GTP) seeks to grow the economy significantly in the short- to medium-term.
    • High rate of urbanisation will present construction opportunities.
    • Huge construction industry growth expected by government.
    • Massive skyscraper projects are planned.
    • Significant emphasis on countrywide infrastructure development.
    • Significantly reduced inflation rates make financing new projects cheaper.

    Threats

    • Corrupt government activities lead to inefficiencies.
    • High prevalence of HIV/AIDS related deaths.
    • Lack of basic human freedoms of association and speech.
    • Possibility of increasing border security tension.
    • Possible tension with Egypt over the Grand Renaissance Dam.
    • Tense political situation.
    • Threat of terrorist activity from surrounding countries.
    • Widespread poverty.

    Outlook

    Construction Industry Forecast\r\nMarket analysts expect the Ethiopian construction industry to keep growing in line with the current GDP growth in the country, between 8% and 8.5% over the next five years. The expected contribution of the construction industry to GDP is 7.6% in 2015 but this is expected to rise as investment continues to enter the country and the government continues to invest heavily in infrastructure development. The contribution to GDP will also increase on the back of massive infrastructure projects, as well as significantly large commercial and tourism construction in Addis Ababa. The massive strides taken by the country to produce its own cement will support the construction industry over the short- to medium-term. The focus on power generation in the country will also help sustain economic growth and allow the construction industry to undertake massive projects and use state-of-the-art equipment. \r\n\r\nMacroeconomic Outlook\r\nAnders Heede, the CEO of BDO for Europe, the Middle East, and Africa, expects Ethiopia to be one of the best investments going forward in the medium-term for international investors. The economy is currently the 12th fastest growing economy in the world and has shown growth of over 10% consistently over the last decade. Ethiopia is also Africa’s fastest growing non-oil economy. It is viewed as stable and reliable because the government has delivered on its five year GTP which has seen massive investments in infrastructure projects. The economy of Ethiopia has also been diversified and is not solely reliant on agriculture or natural resources to sustain it, making it an attractive investment going forward. Heede believes that Ethiopia has all the right basics for an emerging market economy and that it will not be badly affected by the recovery of some developed economies. As long as there are no major events to disturb the current course the country seems to be on, Heede recommends Ethiopia as a safe and valuable long-term investment option.\r\n\r\nPolitical Outlook\r\nWhile analysts and locals still question the state of basic human rights regarding communications and association in Ethiopia, the government is attempting to improve foreign perspective on the country. Some analysts state that Ethiopia’s relationships with Eastern powers will have a ‘trickle-down’ effect and allow them to gain more credibility with Western countries. Others state that the inherent distrust of these powers will deter Western interest. \r\n\r\nDespite the somewhat smooth transition after the death of Meles Zenawi, political risks are expected to remain heightened going into 2015 as the country enters another round of elections which tends to raise social and ethnic tensions. Domestic unrest could also rise with a behind-close-doors power struggle among the political elite for electoral power. The elections on 24 May 2015 are likely to see another win for the ruling EPRDF party that has claimed victory ever since the fall of the Derg regime in 1991. This will be the first election held under the new Prime Minister, Hailemariam Desalegnn, after Meles Zenawi ruled for 21 years. Some news reports indicate that the democratic system is run in an authoritarian manner, and that there is only one opposition politician in Parliament, who has already stated he will not run for office in the May 2015 elections. \r\n\r\nGrowing calls for freedom of the press and free political participation will test the democratic core of the ruling party. Foreign investors will also eagerly wait to see whether the incumbents will allow for looser financial regulations, or whether government’s large infrastructure plans will continue to lock out the private sector. International observers are cautious but optimistic about the political future of Ethiopia.

    The Construction Industry in Ethiopia
    The Construction Industry in Ethiopia 2015

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. SIZE AND STRUCTURE OF THE INDUSTRY 1
    2.1. Geographic Position 1
    2.1.1. Key Cities and Regions 2
    2.2. Size of the Industry 3
    2.2.1. Key Indigenous and Foreign Players 3
    3. STATE OF THE INDUSTRY 7
    3.1. Local 7
    3.1.1. Corporate Actions 8
    3.1.2. Regulations 9
    3.1.3. Market Opportunities and Challenges per Sector 10
    3.1.3.1. Transport 11
    3.1.3.2. Energy/Power 14
    3.1.3.3. Water Supply and Treatment 16
    3.1.3.4. Healthcare 17
    3.1.3.5. Education 19
    3.1.3.6. Telecommunications 20
    3.1.3.7. Residential Building 20
    3.1.3.8. Commercial 21
    3.1.3.9. Retail 21
    3.1.3.10. Hotels and Tourism 22
    3.1.3.11. Mining and Industrial 23
    3.2. Continental 25
    3.3. International 27
    4. INFLUENCING FACTORS 29
    4.1. Economic Environment 29
    4.1.1. General 29
    4.1.2. Effects on the Construction Sector 30
    4.2. Socio-Political Environment 31
    4.3. Infrastructure Deficit 33
    4.3.1. Government Infrastructure Programme Spend 33
    4.3.2. Foreign Direct Investment (FDI) 33
    4.3.3. Private Sector Investment 34
    4.4. Urbanisation 35
    4.5. Local Content 35
    4.6. Corruption 36
    4.7. Industry Supply Chain 36
    4.7.1. Capacity, Quality and Security of Supply 36
    4.8. Industry Specific Issues 38
    4.8.1. General Trends 38
    4.8.2. Input Costs 38
    4.8.3. Cyclicality 38
    4.8.4. Health and Safety 39
    4.9. Competition 39
    4.9.1. Barriers to Entry 39
    4.9.2. Public Procurement and the Tendering Process 40
    4.10. Labour Resources 40
    4.10.1. Training and Skills Development 40
    4.10.2. Licensing 41
    4.10.3. Skills Shortages 41
    4.10.4. Opportunities for Foreign Professionals 41
    4.11. Technology, Research and Development (R&D) and Innovation 41
    4.12. Environmental Concerns 42
    5. SWOT ANALYSIS 44
    6. OUTLOOK 45
    6.1. Construction Industry Forecast 45
    6.2. Macroeconomic Outlook 46
    6.3. Political Outlook 46
    7. INDUSTRY ASSOCIATIONS 47
    8. REFERENCES 47
    8.1. Publications 47
    8.2. Websites 48
    COMPANY PROFILES 49
    Afro-Tsion Construction Plc 49
    Alemayehu Ketema General Contractor 51
    Campbell Project Management Services (Ethiopia) Plc 53
    China road & Bridge Corporation 55
    Consolidated Contractors Company 57
    Flintstone Engineering 60
    Habesha Construction Materials & Development SC 62
    Hela Construction Plc 64
    Midroc Ethiopia Plc 65
    Rama Construction Plc 67
    Sunshine Construction Pvt Ltd 69
    Sur Construction Plc 71
    Tekleberhan Ambaye Construction Plc 73
    Universal Construction Pvt Ltd 75

    Introduction

    This report investigates the Ethiopian infrastructure industry, which is changing rapidly and is developing into a major player in the economy. There are many small firms in the industry, several mid-sized players but no massive local construction corporations. However, the country has developed excellent trade and aid relations with China so many Chinese firms have taken on big projects in the country. The industry is growing rapidly, due to Ethiopia’s significant GDP growth in the last five years on the back of the government’s Growth and Transformation Plan (GTP) as well as increased foreign investment.

    Strengths

    • Considerable resource base.
    • Government’s fiscal policies.
    • Input costs are reasonably low.
    • Real annual growth rate of over 10% per year for the last ten years.
    • Relatively cheap and abundant supply of electricity.
    • Strong relationships with China and Chinese construction firms.
    • Sufficient supply of cement.

    Weaknesses

    • Lack of highly skilled manpower in construction.
    • Poor international trade policy.
    • Poor regulatory environment makes it difficult for private sector investment to occur.
    • Poorly developed communications and technology network.

    Opportunities

    • Government backed Growth and Transformation Plan (GTP) seeks to grow the economy significantly in the short- to medium-term.
    • High rate of urbanisation will present construction opportunities.
    • Massive skyscraper projects are planned.
    • Significant emphasis on countrywide infrastructure development.
    • Significantly reduced inflation rates make financing new projects cheaper.

    Threats

    • Corrupt government activities lead to inefficiencies.
    • High prevalence of HIV/AIDS related deaths.
    • Lack of basic human freedoms of association and speech.
    • Possibility of increasing border security tension.
    • Tense political situation.
    • Widespread poverty.

    Outlook

    Construction Industry Forecast\r\nMarket analysts expect the Ethiopian construction industry to keep growing in line with the current GDP growth in the country. The industry is looking to increase its contribution to GDP from an estimated 5% in 2012 to more than 10% by the end of 2015. Although analysts do not expect this to happen, the contribution to GDP will increase on the back of massive infrastructure projects, as well as significantly large commercial and tourism construction in Addis Ababa. The massive strides taken by the country to produce its own cement will support the construction industry over the short- to medium-term. The focus on power generation in the country will also help sustain economic growth and allow the construction industry to undertake massive projects and use state-of-the-art equipment. \r\n\r\nMacroeconomic Outlook\r\nThe Ethiopian economy is expected to maintain its growth into the 2014/15 financial year, albeit at a slower pace of an estimated 7%. This is because of the lack of investment from the private sector and certain trade regulations which remain restrictive. Foreign Direct Investment is expected to increase in the next financial year as Ethiopia solidifies its place as a modernising African economy. Strong relations with China will support the economy and ensure project funding is secured for necessary economic development projects. The recovery of the international markets in the US and Europe will also allow international investors to relax and make more speculative investments in developing economies. The current account deficit is expected to increase and the public debt to GDP ratio is the most worrying factor going forward, something that could lead to increased inflation and the devaluing of the Ethiopian economy.\r\n\r\nPolitical Outlook\r\nWhile analysts and locals still question the state of basic human rights regarding communications and association in Ethiopia, the government is attempting to improve foreign perspective on the country. Some analysts state that Ethiopia’s relationships with Eastern powers will have a ‘trickle-down’ effect and allow them to gain more credibility with Western countries. Others state that the inherent distrust of these powers will deter Western interest. Despite the somewhat smooth transition after the death of Meles Zenawi, political risks are expected to remain heightened going into 2015 as the country enters another round of elections. This tends to raise social and ethnic tensions. Domestic unrest could also rise with a behind-close-doors power struggle among the political elite for electoral power.

    The Construction Industry in Ethiopia
    The Construction Industry in Ethiopia 2014

    Full Report

    R 1 900.00(ZAR) estimated $104.88 (USD)*

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    Industry Landscape

    R 1 330.00(ZAR) estimated $ 73.42 (USD)*

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    Historical Reports

    The Construction Industry in Ethiopia 2022-09-29

    R 6 500.00(ZAR) estimated $358.81 (USD)*

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    The Construction Industry in Ethiopia 2018-01-30

    R 1 900.00(ZAR) estimated $104.88 (USD)*

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    The Construction Industry in Ethiopia 2015-09-18

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    The Construction Industry in Ethiopia 2015-03-24

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. SIZE AND STRUCTURE OF THE INDUSTRY 1
    2.1. Geographic Position 1
    2.1.1. Key Cities and Regions 1
    2.2. Size of the Industry 3
    2.2.1. Key Indigenous and Foreign Players 3
    3. STATE OF THE INDUSTRY 5
    3.1. Local 5
    3.1.1. Corporate Actions 5
    3.1.2. Regulations 6
    3.1.3. Market Opportunities and Challenges per Sector 6
    3.1.3.1. Transport 7
    3.1.3.2. Energy/Power 7
    3.1.3.3. Water Supply and Treatment 8
    3.1.3.4. Healthcare 8
    3.1.3.5. Education 9
    3.1.3.6. Telecommunications 9
    3.1.3.7. Residential Building 9
    3.1.3.8. Commercial 9
    3.1.3.9. Retail 10
    3.1.3.10. Hotels and Tourism 10
    3.1.3.11. Mining and Industrial 10
    3.2. Continental 10
    3.3. International 11
    4. INFLUENCING FACTORS 12
    4.1. Economic Environment 12
    4.1.1. General 12
    4.1.2. Effects on the Construction Sector 12
    4.2. Socio-Political Environment 12
    4.3. Infrastructure Deficit 13
    4.3.1. Government Infrastructure Programme Spend 13
    4.3.2. Foreign Direct Investment (FDI) 13
    4.3.3. Private Sector Investment 13
    4.4. Urbanisation 13
    4.5. Local Content 13
    4.6. Corruption 13
    4.7. Industry Supply Chain 14
    4.7.1. Capacity, Quality and Security of Supply 14
    4.8. Industry Specific Issues 15
    4.8.1. General Trends 15
    4.8.2. Input Costs 15
    4.8.3. Cyclicality 15
    4.8.4. Health and Safety 15
    4.9. Competition 16
    4.9.1. Barriers to Entry 16
    4.9.2. Public Procurement and the Tendering Process 16
    4.10. Labour Resources 16
    4.10.1. Training and Skills Development 16
    4.10.2. Licensing 16
    4.10.3. Skills Shortages 17
    4.10.4. Opportunities for Foreign Professionals 17
    4.11. Technology, Research and Development (R&D) and Innovation 17
    4.12. Environmental Concerns 17
    5. SWOT ANALYSIS 18
    6. OUTLOOK 18
    6.1. Construction Industry Forecast 18
    6.2. Macroeconomic Outlook 19
    6.3. Political Outlook 19
    7. INDUSTRY ASSOCIATIONS 19
    8. REFERENCES 19
    8.1. Publications 19
    8.2. Websites 20
    COMPANY PROFILES 21
    AFRO-TSION CONSTRUCTION PLC 21
    ALEMAYEHU KETEMA GENERAL CONTRACTOR 23
    CAMPBELL PROJECT MANAGEMENT SERVICES (ETHIOPIA) PLC 24
    CHINA ROAD & BRIDGE CORPORATION 25
    CONSOLIDATED CONTRACTORS COMPANY 26
    FLINTSTONE ENGINEERING 28
    HABESHA CONSTRUCTION MATERIALS & DEVELOPMENT SC 30
    HELA CONSTRUCTION PLC 31
    MIDROC ETHIOPIA PLC 32
    RAMA CONSTRUCTION PLC 33
    SUNSHINE CONSTRUCTION PVT LTD 34
    SUR CONSTRUCTION PLC 36
    TEKLEBERHAN AMBAYE CONSTRUCTION PLC 38
    UNIVERSAL CONSTRUCTION PVT LTD 39

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