Mena jack of all trades with projects totaling $2.5 trillion underway
There are projects worth $2.5 trillion currently underway in Middle East and North Africa (Mena) region and projects worth $1.4 trillion of these are in the execution phase, said a Citi Research report.
$600 billion of the projects are in the pipeline at a relatively advanced stage, and the remainder are in the very early stages of development, the Mena Project Tracker said. The report tracks the main projects (underway/pipeline/cancelled) across the region and is drawn from several proprietary sources, mainly Zawya Projects.
The GCC accounts for almost 90 per cent of total projects by value (about $2.2 trillion). Saudi Arabia ($784 billion) and the UAE ($669 billion) together account for almost 60 per cent of total projects, it said.
Egypt is the only non-GCC country with projects underway in excess of $100 billion, and ranks 5th in the region by value of projects. Projects in Qatar total $273 billion, Kuwait $249 billion, Egypt $143 billion and Oman $127.
Projects underway in Bahrain, the UAE and Oman are valued at over 150 per cent of current GDP, providing significant potential stimulus to economic growth. The extent to which this potential is fulfilled depends on such factors as execution, the timeline of the projects and the nature of the projects, it said.
Projects underway account for a relatively small share of economic activity in non-oil producing countries in the region, with the exception of Jordan, where projects under way represent over 130 per cent of GDP, the report said.
Despite ranking highest in terms of absolute project value, Saudi Arabia ranks lowest among the GCC countries in terms of value relative to GDP, indicating the relatively weak stimulus projects are giving the economy.
The greatest concentration of projects is in the real estate sector, with over $1 trillion underway in the sector. Within this sector, community development, economic and industrial zones account for the majority of the spend.
"Given the chunky and longterm nature of these projects, we believe that the large project values (often in the tens of billions of US dollars) tend to exaggerate the actual spend in any given year.
There are also significant concentrations in the infrastructure, oil & gas, and power & water sectors, where the relatively short execution time frame suggests a relatively higher annual spend, Citi Research said.
For example, there is a heavy bias in the UAE towards real estate projects, while infrastructure projects dominate in Qatar. The oil & gas sector is of greatest significance in Algeria, while Jordan is spending most on power & water.
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