The construction industry witnessed a dynamic interplay of forces in 2023, marked by notable achievements and persistent challenges.
According to the AAK Built Environment Report 2023 released on Wednesday 6th December 2023, the industry experienced an influx of projects, with the National Construction Authority (NCA) receiving a total of 4,770 applications from January to October 2023. Notably, 70.3% of these applications, totaling 3,354, were successfully registered. Residential development constituted the majority, representing 54% of the total applications, reflecting a sustained demand for development. However, the sector faced formidable challenges, notably the escalating costs of construction.
“The cost surged from KES 34,650-77,500 at the beginning of 2023 to KES 41,600-100,800 by December 2023”, said AAK President Florence Nyole. “This spike was attributed to the increased costs of construction materials and fuel, exemplified by the surge in the price of steel reinforcement bars from KES 140.60 per kg in December 2022 to KES 160.26 per Kg in December 2023, marking a 14.29% increase. Similarly, the cost of cement rose from KES 650 per 50 Kg bag in December 2022 to KES 750 in December 2023, marking an approximate increase of 15.38%.
The report notes that these escalations have been largely a result of the increased import costs influenced by the devalued currency. “In addition, land rates have surged by an alarming 6.41-fold since December 2007. In urban centers like Nairobi, what was valued at KES 30.3 million has now risen to KES 190.4 million in 2023. These exorbitant construction costs, hinged on the cost of building materials and land, threaten the achievement of affordable housing.”
The Status of the Built Environment (SBE) report provides an overview of the current state of the Built Environment in Kenya highlighting key trends, challenges and opportunities.
The AAK President also touched on industry regulation challenges. She noted: “The absence of essential planning and legal frameworks, such as local physical development plans, zoning regulations, Development Control Regulations, and Building Regulations, contributed to haphazard developments in urban areas. For instance, the Nairobi Development Control Ordinances expired in 2014, and the zoning guidelines have been arbitrary.”
On the Government’s Affordable Housing Program (AHP), the President noted that the engagement of consultants in the Affordable Housing Program has been AAK’s focus since the inception of AHP under the Big Four Agenda.
“While some of our members have volunteered to be consultants for the affordable housing project, there is still an issue when it comes to negotiation of the consultation fees for the work they are doing. Feasibility studies also need to be done for the projects and we have given our comments on the same,” she noted.
