Logistical limitations and a lack of supply-chain capacity in the African construction market risk creating a barrier to investment, says a new report from global professional services firm Turner & Townsend. 

“These factors risk impeding progress across Africa, where opportunities from renewables to rare-earth metals are providing strong foundations for growth,” states the document.

The Global Construction Market Intelligence (GCMI) report 2025 shows that across Africa, average construction costs remain low, at $1 180 per square metre, owing to good labour availability and access to materials.

Despite some local currency fluctuations impacting construction costs in dollar terms, such as 45% inflation in Lagos last year, most regions are stable, with good general labour availability and access to materials, and relatively little impact from the recent global trade ruckus, as African economies are generally not closely tied to the US.

The report indicates that Zimbabwean capital Harare is the most expensive African construction market at $2 042 per square metre – $800-plus more than Lagos, which is in second place at $1 183, with Cape Town third and Johannesburg fourth.

The continent is seeing growing populations, increasing spending on renewable energy (in East Africa in particular), and significant investment in modernisation and urbanisation, adds the report.

“This, combined with low construction costs, offers an appealing outlook for investment and is creating a strong sense of optimism in many areas. 

“For example, in Kenya, where costs in the capital average $834 per square metre, a focus on providing cheap, plentiful, sustainable power is combining with a stable currency and low import duties to draw in investment.”

Countries such as Uganda, Zimbabwe and Rwanda are seeing investment in social infrastructure and leisure and are rebuilding construction supply chains after decades of relative instability – encouraging new business to enter these markets.

South Africa, traditionally one of the strongest African construction markets, is seeing the benefits of overall economic recovery and political stability provided by a Government of National Unity. 

However, inflation driven by high fuel prices remains a concern.

The GCMI shows that construction costs in Cape Town and Johannesburg sit at an average of $1 171 and $1 141 per square metre, rising 8% and 7.4%, respectively, last year.

Both South African markets are, however, the most expensive in terms of wages within the list of the top-ten most expensive African construction markets.

Cape Town sits at $6.8 an hour and Johannesburg at $5.1 an hour. Harare comes in at $3.4 an hour and Lagos at $0.8 an hour.

In the most expensive market – New York – wages an hour average $131.4 an hour.

On The Downside
The Turner & Townsend report identifies a number of risks that may impact this generally good-news African story.

This include historic underinvestment in logistics networks, which are a challenge for large-scale investment in the manufacturing and industrial sector. 

The continent also has a limited number of top-tier contractors able to take on larger programmes.

To prevent programmes being impacted, clients need to take a more active role within this area to bridge the gap where there are shortages, directly investing in training local skills, or bringing in international expertise where needed, states the report.

“There are plentiful signs for optimism across Africa, with growing opportunities to drive investment that supports economic diversification,” comments Turner & Townsend Africa regional real estate lead Wendy Cerutti.

“As well as the greater urbanisation and development of social infrastructure we are seeing on the back of many regions’ growing populations, there is also a significant focus on high-tech industries from advanced manufacturing to data centres, as well as major government spending on renewables.

“The counterpoint to growth is that it comes with supply-chain challenges, making labour and logistics the priorities for clients. 

“Important shortages are now emerging in terms of top-tier contractors and specialist skills, which clients need to proactively manage by taking greater ownership of construction infrastructure, and directly building up the skills they need either locally or through importing labour.

“Doing this successfully will require programmatic thinking from clients to derisk projects.”

From an analysis of 99 markets globally, the GCMI shows the US maintaining a strong hold on the top rankings of the most expensive places to build. 

Five US cities are in the top ten. New York is in first place, with an average cost of $5 744 per square metre, followed by San Francisco at $5 504.