Kenya: Value of Construction Approvals in Nairobi falls to eight-year Low
The value of building approvals in Nairobi for the 11 months to November 2020 fell to Ksh150.5 billion (approx. US$1.39 billion); a new low that has not been seen in the last eight years.
This dip has been attributed to the Covid-19 pandemic. The last time the Nairobi city council saw these kinds of low numbers was in November 2012 at Ksh171.3 billion.
The Kenya National Bureau of Statistics (KNBS) published data that showed applications for residential buildings stood at Ksh105.6 billion. These numbers on residential buildings haven’t been this low in the last six years. The non-residential segment has also declined to Ksh22.8 billion representing a nine-year low for this 11-month period.
Ms Mugure Njendu, then Architectural Association of Kenya (AAK)’s president said, “The declining performance of the larger built environment industry is bound to continue for a significantly lengthy period as the country continues to suffer from the impacts of high national debt, labour shortages and reduced infrastructure spending amid a depressed economy."
“In terms of recovery, the residential and commercial construction sectors which were already experiencing a declining performance due to an oversupply of spaces prior to the Covid-19 pandemic are expected to take the longest time to recover.”
A survey on the impact of Covid-19 on the built environment in Kenya, done in June by the AAK, showed that 87.5% of consultants in the city recorded a significant decrease in client enquiries for new projects.
Ms Mugure Njendu continued, “Consultants were increasingly finding it difficult to obtain construction supplies and materials with another 31.3 per cent of the respondents reporting that the period had seen an escalation in difficulty of obtaining development approvals.”
Photo: Building site in Nairobi, Kenya (GioRan | Wikimedia Commons)