Construction and Real estate

Kenya's economic revival has seen the the construction and real estate sector grow very rapidly and the sector is projected to grow annually by 16.7 percent on average, its GDP rising from 2.3 percent in 2002 to 4.2 percent in 2007 according to the Economic Recovery Strategy for Employment and Wealth Creation government report. This growth has seen the consumption of cement and construction materials increase phenomenally. Much of the cement is used in the much-needed road construction and maintenance, with major companies such as East African Portland Cement Company (EAPC) and Bamburi Cement making strong contributions.

EAPC has been around for more than 70 years and makes well-known cement products such as Blue Triangle, as well as kerbstones, concrete pavers and slabs. The country's half year results ending on December 31, 2005 showed a 20 percent increase in turnover. This increase is greatly attributed to growth in cement sales due to resurgence in the building and construction sector.

Bamburi Cement, founded in 1951, is another major player in the field. Bamburi today boasts of famous brands such as Power Plus Cement and Nguvu Cement. A 2004 economic survey noted that the construction sector's key economic indicators were showing an improvement in performance as well, specifically the total value of building plans approved. The overall construction cost index recorded an increase of 7.1 percent in 2003, compared to 1.4 percent in 2002.

Investment opportunities in this sector range from urban renewal and construction of middle and low income housing to income housing to the manufacturing and supply of building materials and components. H Young & Co (EA) is one of East Africa's leading construction groups with numerous civil engineering, road construction, structural steelworks and electrical mechanical installation projects. These include a KSH 1.26 billion project to build the Sondu Miriu Hydro-Electric Power Project and many road rehabilitation projects like the Katito- Kendu Bay Road Project.

Cement Production & Consumption

	2005		2006
	Production	Consumption	Production	Consumption
January	154,781	117,008	161,701	136,601
February	167,472	120,138	158,364	129,892
March	180,591	119,146	164,533	145,723
April	172,381	129,831	167,015	130,696
May	179,257	119,448	173,367	137,022
June	168,725	129,753	179,889	148,516
July	187,233	132,937	191,968	148,648
August	182,892	144,556	186,962	160,361
September	188,658	147,311	180,924	151,012
October	182,446	139,472		172,258
November	174,296	135,831		163,825
December	184,524	137,069		141,260
Total	2,123,256	1,572,500		1,765,814

source: Central Bureau of statistics

Housing

The government aims to continue developing housing finance, as well as provide the legal framework to promote further housing development. In the country's quest to provide affordable shelter for everyone, there are many construction projects, which need investment. Over the last 20 years, Kenya's urban housing has found itself in a state of disrepair, which has had the knock-on effect of creating informal settlements. The national Housing Corporation (NHC) was created in 1953 to develop and facilitate adequate and affordable housing. Currently, it has development projects for rental units and tenant purchase.

Knowledge transfer-Large scale

The Japan-Kenya know-how exchange on the road and bridge construction is one of the many initiatives to set ready Kenya for Vision 2030 - the country's long-term strategy to achieve sustainable growth that will benefit Kenyans at all levels of society.

At a seminar held in Kenya in 2007, representatives from the Kenyan Ministry of Roads and Public Works, as well as a delegation from Japanese embassy and other Japanese attendees, got together with the view to exchange ideas regarding the technological developments taking place in the industry.

It is expected that this exchange will help Kenya tackle infrastructure problems in the road network as co-operation of this kind with the Japanese has proven track record. The Japanese International Co-operation Agency (JICA) has a long relationship with the government of Kenya, especially in the area of road financing, construction and maintenance of equipment and technical assistance. Loans from Japan have literally helped build bridges since 1977. JICA has also participated in the training of engineers in bridge technology, both in Kenya and Japan. The agency has created a bridge inspection manual, which is used by bridge officers to ensure proper management.

Knowledge transfer - Small scale

Netherlands-based Exchange has created a programme in which Dutch students take part in projects, such as the construction of sand storage dams in Kenya. Working closely with local people, the goal of the projects has been the establishment of basic facilities and knowledge transfer in developing countries.

Knowledge exchange in other areas

In finance, the ShoreCap Exchange Corporation holds seminars on governance and leadership in banking in the US, with many attendees coming from Kenya. Based on the idea that "bankers learn best from other bankers", the seminar recognizes that you are what you know, and seek to transfer ideas on strategies of setting up risk management teams and systems at banks, as well as discussing the range of financial, credit and operational tools to better manage risk in developing economies.

Knowledge exchange is also on going elsewhere: Shelter Forum plays a key role in know-how transfer relating to human settlement issues in Kenya with other NGOs and grassroots organizations. There are also women groups from the region (such as Women of Uganda Network) who have travelled to Kenya for know-how exchange meetings on subjects such as community issues, particularly for those who have lived through armed conflicts.

Whether it is major industrial projects like building a bridge or the relatively modest but vital construction of water pump, know-how exchange is proving that "knowledge is power".

Back to the top