Sub-Saharan infrastructure development expert and director of the African Business Council, Dr. Tinashe Manzungu has urged African countries to invest in the continent’s infrastructure development to unlock the potential of the real estate market globally.
Speaking during a public annual lecture at the European School of Economics in London last week, Manzungu, who is also a board director at the Common Market for Eastern and Southern Africa (COMESA), highlighted Africa’s emergence as a potential hotspot for real estate investment due to its rapid urbanisation. He emphasised the need for the continent to escalate its efforts in establishing a robust global real estate market.
As a guest speaker at the lecture, which was a side event of the 13th African Achievers Awards, Manzungu also received the Excellence in Leadership and Global Corporate Enterprise in Africa Award.
“Africa is emerging as a potential hotspot for real estate investment due to its rapid urbanization, rising middle-class population, increased foreign direct investment, and improving business environment. Statistics show promising opportunities and strategies that can accelerate Africa’s growth in the real estate sector,” said Manzungu.
He stressed that investing in infrastructure is crucial for unlocking the potential of Africa’s real estate market. Developing quality transportation networks, power supply and other essential amenities will attract more investors and drive economic growth.
Manzungu called for partnerships between the public and private sectors in real estate development, with governments providing policies, land, and infrastructure support while private investors bring capital and expertise.
Given the massive urban migration happening in many African countries, where people are moving from rural areas to urban centres in search of better opportunities, Manzungu emphasised the importance of establishing affordable housing initiatives.
“Africa is experiencing significant urbanisation, with its urban population expected to double by 2050. This urban growth creates a demand for housing, commercial spaces and infrastructure, making it an attractive investment opportunity for real estate developers,” he explained.
He urged governments, with support from the private sector, to provide incentives and remove regulatory hurdles to encourage the development of affordable housing.
Highlighting the significance of technology adoption in real estate development, Manzungu urged the continent to leverage digital platforms, smart cities, and property technology (prop-tech) to enhance efficiency and transparency in the real estate sector.
“Technology can streamline property transactions, facilitate property management and attract tech-savvy investors,” he added.
Manzungu also encouraged European countries to invest in Africa’s real estate sector, especially now as the continent experiences a rising middle-class population. With the expansion of Africa’s middle class, disposable incomes are increasing, driving demand for quality housing, retail spaces and leisure facilities.
“Africa’s middle class is projected to reach 1.1 billion people by 2060, representing a significant consumer base for real estate developers. The retail sector in Africa is expected to grow at a CAGR of 7.3 per cent between 2021 and 2026, driven by the rising middle-class population,” he explained.
In recent years, Africa has attracted increasing foreign direct investment (FDI), including in the real estate sector. Manzungu revealed that FDI flows into Africa’s real estate sector increased by 14 per cent in 2019, reaching an estimated US$3.3 billion. South Africa, Nigeria and Kenya have been the top destinations for real estate FDI in Africa.
Manzungu’s expertise and insights underscore the importance of infrastructure development in propelling Africa’s real estate market forward and positioning the continent for sustained economic growth. As urbanisation continues and the middle class expands, the opportunities for investment in Africa’s real estate sector are poised to grow significantly.