How Construction Companies in Ethiopia Benefited from Economic Growth

Over the past 20 years, construction companies in Ethiopia have been able to benefit from favorable macroeconomic conditions. Despite its challenges, Ethiopia has been one of Africa's fastest-growing economies over the past two decades.

In 2024, the IMF expects Ethiopia's GDP to expand by 6.2%, accelerating to an estimated 7% per year by 2029. In absolute terms, Ethiopia's figures are staggering. In 2004, the country began its expansion with a GDP (current USD) of $12 billion. By 2024, the total GDP has multiplied by 17, reaching $205 billion. By 2029, the IMF projects GDP to reach $364 billion.

Although population growth accounted for some of these increases, the total population "only" grew from 75 million in 2004 to 133 million in 2024. This is historically an impressive rate of expansion, but Ethiopia has also experienced enormous per capita economic gains.

GDP per capita grew from $152 in 2004 to $1,910 in 2024. Ethiopia is still a poor country on a per capita basis, but the speed of progress is creating enormous opportunities.

For construction companies in Ethiopia, these improvements meant the need to build new roads, buildings, power plants, and other infrastructure. In this article, we will examine the construction industry in Ethiopia at large, as well as its current major players.

The Current State of the Construction Industry in Ethiopia

Ethiopia is the third-largest construction project market in East Africa, behind Kenya and Tanzania. Currently, there are 145 ongoing and upcoming projects in the country, with a total value of $113 billion.

70% of them are under construction, while 30% are in different planning stages. This project pipeline is partly the result of recent challenges in the country, as other East African countries have relatively more projects in earlier stages (the regional average stands at around 40%).

Construction projects in Ethiopia are primarily concentrated in the areas of building construction, energy/electricity, and transport infrastructure. The largest project in the building construction sector is the $50 billion National Housing Project. The famous Grand Ethiopian Renaissance Dam (GERD), as well as a nuclear power plant in the feasibility stage, are some of the largest energy projects. In the transport sector, the country is developing another rail line to neighboring Djibouti. To expand its role in global air traffic, the Bishoftu Airport project aims to build the region's largest airport, with capacity for around 100 million passengers per year.

Leading Construction Companies

Behind these projects are a wide range of contractors. The following six are the ones working on the highest number and value of projects, making them some of the most significant players in the construction industry in Ethiopia.

Top 3 Construction Companies in Ethiopia by Project Value

  • Ovid Construction
    Ovid Construction is part of the Ovid Group. It is primarily focused on building construction, where it is currently working on Ethiopia's massive $50 billion National Housing Project, as well as some prestigious buildings such as the National Theatre.
  • GIFT Real Estate
    GIFT Real Estate is part of the GIFT Business Group. Founded in 2005, the company primarily focuses on the building construction segment, with projects such as houses, apartment buildings, and villas. Most importantly, it has also been awarded parts of Ethiopia's National Housing Project.
  • Webuild Ethiopia
    Webuild is an Italian EPC contractor. Its Ethiopian subsidiary has been in charge of building the Grand Ethiopian Renaissance Dam (GERD), which is nearly completed. Additionally, it has been awarded the contract to build the 2,200 MW Koysha Hydropower Plant.

Top 3 Construction Companies in Ethiopia by Number of Large Projects

  • CCECC Ethiopia
    The China Civil Engineering Construction Corporation (CCECC) is one of the leading Chinese contractors in Africa. Its Ethiopian subsidiary, CCECC Ethiopia, is working on several projects in the country, such as the Africa CDC regional headquarters, the Addis Ababa Business Complex, and the Ethiopian Airlines headquarters.
  • Ethiopian Construction Works Corporation
    The Ethiopian Construction Works Corporation is a state-owned enterprise under the Ministry of Urban Development and Construction of Ethiopia. Its main focus is large road projects, but it has also been awarded the Chaka Project, which includes the construction of a palace, a luxury hotel, and other facilities.
  • Sunshine Construction
    Sunshine Construction is part of Sunshine Group, an Ethiopian conglomerate active in the construction and trade sectors. It primarily focuses on road projects and has been awarded the Debre Lemi and Jihur Deneba Road projects, as well as the upgrade of the Degolo Kelela Road. However, one of its largest projects is the Ethiopian Airlines Employees Accommodation project, valued at $500 million.

Article Source: abiq