The Kenyan construction industry can expect some relief from the global financial tension thanks to the Government’s massive infrastructure investment.
In his budget speech for the financial year 2009/2010, Finance Minister Uhuru Kenyatta gave infrastructure development projects a major boost after allocating some Sh140 billion for infrastructure spending.
By allocating more resources to infrastructure development, the government can easily maintain growth in the face of the economic slowdown.
Demand for cement – a key indicator in the state of the construction industry – will for instance remain relatively high despite the current economic tension as cement is a key building material.
Multi-million projects, including the Thika Road project and the construction of the Wajir and Kisumu airports, are expected to increase the demand for cement in Kenya during this year.
In the recent past the construction industry has been kept afloat by large infrastructure projects such as Namanga to Athi River mega road project and Jomo Kenyatta International Airport rehabilitation. The government’s low-cost housing initiatives have also boosted the demand for building materials in Kenya.
Although the construction industry can remain optimistic, there is no doubt that this year’s growth will be slightly lower than expected. Kenya’s largest cement maker, Bamburi Cement, recently predicted that the consumption of cement in East Africa will grow by 12 per cent this year (2 per cent down from its 15 per cent earlier prediction).
Bamburi pegs this growth on massive road projects and individual home-building. Cement consumption in 2008 was 2.4 million tonnes in Kenya, 1.5 million tonnes in Tanzania and 1.2 million tonnes in Uganda.