BMI View: Namibia 's construction industry will record positive growth throughout our forecast period as the government directs significant expenditure towards the development of key infrastructure. The largest expansion will come over the first half of our forecast period, after which real growth is expected to slow. Weighing on the potential of the sector is the lack of substantial private investment into major infrastructure projects.
Forecast & Industry Developments
We continue to forecast 10.7% real growth in 2016 as the government directs substantial spending - around 50% of total non-interest expenditure of the FY2016/17 budget - towards infrastructure development, particularly in the transport and utilities sectors to improve the overall ease of doing business in the country.
The Namibian government is eager to harness the public-private partnership (PPP) model to encourage much-needed private investment into its construction industry. It has used the model to attract financing into power and water projects, and is reportedly drafting a PPP Bill to be ready by the end of 2016, to provide improved clarity around project financing options.
Industry growth is set to slow from 2019 as major projects come to a close and the government struggles to develop big-ticket projects in its energy sector, including gas infrastructure. The low commodity price and political indecision around the development of the sector are key deterrents to investors.
Growing private interest in Namibia's real estate sector, particularly in the coastal towns of Swakopmund and Walvis Bay as popular tourist destinations, will be key to supporting industry growth over our forecast period.
We forecast an annual average growth rate of 5.9% in real terms over our full forecast period between 2016 and 2025. Nominal industry value is expected to rise from an estimated USD500mn in 2015 to USD1.1bn in 2025.
|f=BMI forecast. Source: BMI|
|Construction industry value, NADbn||7.82||8.94||10.22||11.38||12.65|
|Construction Industry Value, Real Growth, % y-o-y||10.70||8.52||8.25||5.32||4.82|
|Construction Industry Value, % of GDP||4.7||4.8||4.9||4.9||4.9|
Namibia's overall score in our Infrastructure Risk/Reward Index for Sub-Saharan Africa puts in second position overall, with a score of 52.6, unchanged from last quarter. It remains comfortably above the regional average of 28.9
Across all components, it scores least well for Country Rewards, owing to the country's underdeveloped banking sector, which makes infrastructure financing difficult to provide domestically.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Namibia Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Namibia Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Namibian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Namibia to test other views - a key input for successful budgetary and planning in the Namibian infrastructure market.
- Target business opportunities and risks in the Namibian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Namibia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.