Rwanda's construction sector eyes growth

Rwanda's construction sector is experiencing a significant boom driven by a fast-growing population and robust economic growth. With a population now exceeding 14 million citizens, the real estate market in Rwanda is poised to reach AU$81.62 billion in investments by the end of 2024. CNBC Africa's Aby Agina recently spoke to Fatima Abdi Idd, CEO of Mr Roof Rwanda, to gain insights into the sector's outlook. The construction industry in Rwanda has been witnessing remarkable growth, with the GDP expanding and the country's economic performance returning to pre-COVID levels. Construction and real estate development play a vital role in driving this growth, with both the private and public sectors actively contributing to the industry's expansion. In Rwanda, the private sector is a key player in the construction industry, particularly in real estate investments. Individuals are increasingly channeling their disposable income into property investments, making real estate a popular asset class. The trend of private investment in real estate is evident across the country, with commercial and residential developments springing up rapidly. It's common to see new buildings emerging in strategic locations, indicating the considerable investment flowing into the construction sector. On the other hand, the public sector in Rwanda allocates a significant portion of its budget to infrastructure projects. The government's focus on urban planning and housing development, including the upgrading of informal settlements, underscores the construction boom in the country. This concerted effort is reshaping Rwanda's urban landscape and driving demand for construction materials. Construction materials represent a substantial portion of building costs in Rwanda, ranging from 65% to 80%. This underscores a significant opportunity for suppliers and manufacturers in the construction materials industry. The growth potential in Rwanda's construction sector is evident in the success story of Mr Roof. Since commencing operations in mid-2022, the company has witnessed substantial revenue growth. In 2023, the company's revenues doubled compared to the previous year, demonstrating the sector's growth trajectory. The first two quarters of this year have also shown promising results, indicating continued expansion and growing demand in the market. With Rwanda offering a unique investment opportunity in commercial and residential properties, as well as large-scale infrastructure projects, the real estate sector presents attractive prospects for investors. The country's strategic location within the East African Community market, boasting a population of 150 million people, further enhances its investment appeal. Despite perceptions of Rwanda as a smaller economy, the country's advantageous position within a larger regional market underscores its potential for real estate investment. Investors are increasingly recognizing the opportunities in Rwanda, with businesses like Mr Roof benefiting from the country's growth trajectory and demand for construction solutions. As Rwanda's construction sector continues to flourish, investors are advised to capitalize on the sector's growth potential and explore the diverse opportunities it offers.