Covid-19 update: The Africa Report

On 23rd March 2020, we launched the Knight Frank Africa Report 2020/21, but regrettably without the pomp and colour that I had anticipated. 

The report was markedly ushering in a new dawn both literally, this year marked exactly a decade since the first Africa Report was published and figuratively, since it was my first time editing and writing the report since joining the Knight Frank research team in 2019. 

Unfortunately, the launch coincided with the developing throes of a global pandemic that has now effectively shut down the world.

As well as providing sector insights and details of investment opportunities across Africa’s real estate markets, the report also focuses on the broader themes likely to impact this amazing continent’s real estate landscape in the new decade.

The overarching theme of the report this year, focuses on Africa’s increasing integration efforts that are currently centred around the Africa Continental Free Trade Agreement. At the core of this agreement is the aim to increase Intra African trade through a reduction in trade tariffs and improved infrastructure connectivity. 

This theme could not have been timelier as the need for Africa to be self-sufficient through industrialisation has becomes more apparent in the light of Covid-19. 

Supply chains disruptions have been experienced across the world and Africa continues to be greatly impacted by the global shutdown, which is affecting the majority of its trading partners. 

Kenya, for example, has reported a 5% to 10% increase in the cost of construction materials as a result of supply shortages from China due to the coronavirus embargo. 

In the report we also highlight Africa’s affordable housing challenge, with the current deficit standing at a staggering 56 million housing units across different cities. This challenge could not have been more evident than at a time where social distancing and sanitation are the mitigating factors towards flattening the curve of the virus’s spread. 

The different initiatives adopted by various governments towards solving this challenge will be imperative in ensuring that housing as a basic human need is assured across the continent.

Technology and innovation have taken centre stage during this pandemic in sustaining basic day-to-day routines. Africa’s technology adoption has continued to leapfrog any existing infrastructure deficits. 

Our focus on real estate innovation through blockchain adoption as a measure of land reform, online listing of property, flexible space demand as well as online retail provides a sneak peek in to the new ‘normal’ that is impacting real estate sectors in the continent.

In terms of Africa’s outlook, we highlight Ethiopia, Egypt, Nigeria and Côte d’Ivoire as emerging investment hotspots for the next decade based on a nightlight analysis. Despite the current economic downturn, Africa’s growth continues to have a strong justification based on its demographics. 

The future remains bright for a continent that continues to prove its resilience despite the various sweeping tides it has encountered.

View the report here