Summary

GlobalData expects Kenya’s construction sector to have expanded by 7.6% in 2020, despite disruption caused by Coronavirus (COVID-19). Due to diminishing revenues, however, the government will once again tap into the credit markets to finance the budget deficit, which now accounts for nearly one-third of the budget. Kenya will continue to adopt IMF policy reforms, which are focused on strengthening fiscal and monetary policy. Kenya’s economy remains resilient due to its diversification and low dependency on natural resources for export, so GlobalData is optimistic about the construction outlook for the country as economic conditions normalize and expects the government to aggressively push for public-private partnership (PPP) and private investment. Several advanced PPPs in transport and energy will go ahead, which will still give a boost to the infrastructure and energy construction sectors in the medium term, albeit at a slower pace. At the same time, government capital spending will be under pressure as part of fiscal consolidation efforts.

Expanding Kenya's manufacturing sector by creating special economic zones (SEZs) is another policy objective, together with food security, healthcare, and housing, according to the president's Big Four agenda. However, government infrastructure projects are at risk of stalling due to a loss in revenue and an increase in spending on the health sector to combat the virus and plans to extend the new standard gauge railway (SGR) beyond Naivasha have been paused. Given the uncertain outlook for oil prices and the high cost of building an oil export pipeline to the coast, the exploration phase for Kenya’s oilfield development in Turkana County has been postponed to the end of 2021, pushing the potential start date for oil production from 2023-2024 to 2025.

President Kenyatta’s administration plans to make its way through next year’s presidential election by investing in infrastructure projects to create employment and by giving targeted subsidies to the tourism and agricultural sectors. The president has directed the executive to focus on the implementation and completion of ongoing Priority Projects and Programmes, as set out in his Administration’s Transformative Agenda for the Nation despite the challenges posed by the COVID-19 outbreak. The 2020/21 budget allocations towards energy and infrastructure include KES172.4 billion (US$1.6 billion) to improve and expand the existing infrastructure; KES18.1 billion (US$170.1 million) towards SGR Phase II (Nairobi to Naivasha); KES6 billion (US$56.4 million) for the LAPSSET Project; and KES5 billion (US$47 million) for the Mombasa Port Development Project. One of the biggest beneficiaries of the budget is tourism and manufacturing sectors. Regarding the manufacturing sector, KES4 billion (US$36.8 million) was allocated for the development of special economic zones in Naivasha and Athi River - this would boost recovery in the construction sector in the short term.

This report provides detailed market analysis, information, and insights into Kenya’s construction industry, including -
- Kenya’s construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Kenya’s construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Kenya. It provides -
- Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Kenya, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

- Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using GlobalData's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.