Building on Kenya's Construction spree

By Philip Etyang in Nairobi, Kenya (China Daily) Updated: 2015-03-16 09:40

While sectors of the Kenyan economy such as agriculture, tourism and the money market have taken a beating in the last few years, the nation's construction, automotive manufacturing and transport industries, each an important component of the economy, have flourished.

Industry players attribute the rise of the three industries, all interdependent and interconnected, to the growth in road construction and in demand for real estate.

Government projects such as the Lamu Port South Sudan Ethiopia Transport corridor project, construction of geothermal and wind power generation plants plus the Standard Gauge Railway project have contributed significantly to the growth of these sectors.

Real estate investments, especially in major cities in Kenya such as Nairobi, Mombasa and Kisumu, have pushed industry players to invest in prime mover trucks and other heavy-duty vehicles.

The Wealth Report by global real estate consultancy Knight Frank in 2012 placed Nairobi as the world's fastest-growing real estate market, beating cities such as Miami and Monaco. The annual report analyzes global property markets, wealth distribution and investments.

The growth in real estate and infrastructure projects in Nairobi has much to do with investors who view the capital as Africa's hub. Knight Frank's head of agency Anthony Havelock said in the consultancy's 2014 report that Nairobi is the most important African business center between the Mediterranean and Johannesburg.

The prospect of growth in infrastructure in Nairobi still appears promising, with the latest report ranking Nairobi 17th out of a list of 25 cities - the rest of which were Asian cities - that are expected to see the fastest growth in the number of ultra-wealthy individuals over the next decade.

"Nairobi is the only non-Asian city to feature in the top 25 cities ranked by growth, underlining the region's expansion and the increased openness of many of its economies," according to the report.

Infrastructure projects in the capital and other parts of the country have spurred growth in the light, medium and heavy-duty vehicle manufacturing industries as well as the construction and transport industries.

Foton East Africa Ltd, a subsidiary of Beijing-based Beiqi Foton Motor Co Ltd, entered the Kenyan market in 2010, establishing a head office in Nairobi and later completing one of the biggest assembly plants in East Africa.

Beiqi Foton Motor Co Ltd specializes in the manufacture of light and heavy trucks, agricultural machinery, sport utility vehicles and buses, all of which are now available in the East African market.

Foton established its $10 million assembly plant on a 40.5-hectare piece of land located in Syokimau, some 20 kilometers from the capital and next to Jomo Kenyatta International Airport.