Value of construction projects hit Sh310b despite dip in approvals

IEK President Eng.Shammah Kiteme, Architectural Association of Kenya President Florence Nyole and Taita Taveta Public Works CECM Arch Martin Tairo during the release of Status of the Built Environment report in Nairobi, on December 5, 2024. [Boniface Okendo, Standard] 

The construction sector recorded a slight growth this year, raking in Sh310 billion according to records from the National Construction Authority (NCA). This was an 11.5 per cent increase compared to the last year.

“The construction industry recorded a slight growth. The projects registered by NCA were valued at Sh309.53 billion - recording an 11.5 per cent increase,” said the Architectural Association of Kenya (AAK) in its Status of The Building Environment (SBE) report that covered between January-October this year, and released Thursday evening in Nairobi.

The AAK SBE report since 2017 provides an overview of Kenya’s built environment industry, highlighting key trends, challenges, and opportunities.

Residential properties recorded the highest approvals of 2,853 projects at Sh181 billion, followed by commercial with 620 projects at Sh57.7 billion.

Mixed-use with 291 projects and other works with 360 projects tied at Sh35.4 billion, bringing the total projects to 4,124 with a combined value of Sh309.5 billion.

Despite the slight growth, AAK noted that the approval process is still a challenge to many counties. “Efficient development permitting systems remain a mirage, with 40 counties still using manual processes. A county like Kiambu for instance, which had gone digital has reverted to the manual process, thus affecting approvals. Payment of unofficial facilitation fees to expedite applications is a common occurrence,” said AAK President Florence Nyole.

According to the report, only 16 counties or 32 per cent of the devolved units have approved County Spatial Plans (CSPs), 11 or 26 per cent have drafted pending approval. Tharaka Nithi is the only at situational analysis and 19 counties are in the early stages of CSP preparation. 

Nairobi County generated Sh1.7 billion from approvals between January and October 2024, a 55 per cent increase compared to 2023. According to the report, residential led at 51 per cent, followed by commercial at nine per cent. Special purpose and industrial remained at nine per cent, while educational (8 per cent), mixed-use (four per cent) and recreational finished in that order.

This is despite the AAK saying it has issues with approvals where the longest timeline recorded for a project to be approved is 14 weeks.

Kisumu County followed Nairobi after receiving 192 development applications between January and October 2024, generating submission fees totalling Sh9 million, where 67 per cent of projects were approved, 31 per cent deferred and two per cent rejected.

AAK attributed the low approvals to the Planning and Development Management System (PDMS), which was discontinued three years ago, significantly impeding efficiency. Kiambu County received 1,353 development applications from January to October 2024, where 67 per cent were approved. The remaining were either deferred or rejected.

“The county government’s move to shift from online to manual submission is retrogressive. Approval fees include charges for unresolved land rates on mother titles,” said Ms Nyole.

The cost of construction has relatively stabilised this year compared to 2023, averaging between Sh48,750 and Sh84,000. Prices of materials showed mixed trends, with the cost of cement rising by 11 per cent, while petrol prices dropped by 17 per cent between December 2023 and December 2024. On the other hand, land rates continued to rise, with the average price of an acre in Nairobi reaching Sh204 million, up from Sh190 million in the previous year.

On the safety of buildings in Nairobi and the need for enforcement, the report said 20,649 buildings have been audited so far, is with 1,333 in 2024,  where 42 buildings were deemed dangerous requiring immediate evacuation in 2024.

According to a survey carried out by AAK and the Kenya Alliance of Resident Associations (KARA), on 957 residents from 19 counties, 87 per cent of respondents have encountered safety issues related to construction in their neighbourhoods, 73 per cent of residents are dissatisfied with the responsiveness of regulatory bodies and 70 per cent of respondents view their local infrastructure as poor or substandard.

“Key issues raised included safety concerns related to construction, structural integrity issues, traffic disruptions, violations of permitted construction times, and non-compliance with zoning regulations,” said Nyole.

Other concerns highlighted included inadequate public participation exercises, often conducted in violation of Article 55 of the Physical and Land Use Planning Act of 2019. Residents emphasised the need for reforms, particularly in enforcing adherence to zoning and building regulations, addressing high-rise developments in low-density residential areas, strengthening regulatory oversight, implementing penalties for non-compliance, and demolishing illegal structures.

These insights highlight the critical need for improved governance and accountability in urban planning and development. The National Building Code 2024, which AAK said is the first comprehensive update adopted in 56 years, overlooks contributions from emerging professions within the built environment and calls for the formation of a Code Council.

Green building practices also gained traction in 2024, with an increasing number of developments earning green building certifications.

For instance, the Nairobi City County governor’s office became the first government building in Africa to receive the EDGE certification. “Counties such as Nairobi, Homa Bay and Laikipia are also advancing sustainability by developing green building guidelines to guide their sustainable development,” Nyole said.

Following the inaugural National Forum on Buildings and Climate in May 2024, Nyole said the State Department of Public Works initiated the development of a National Decarbonisation Roadmap to guide emissions reduction in the building sector.

During the year under review, the report also recorded a value of between Sh3.3 billion to Sh1.5 billion in cases between January to August in the built environment under Alternative Dispute Resolution (ADR). The highest dispute recorded was Sh387 million, with yhe contract valued at Sh5.62 billion, and the total sum of the reported dispute valued at Sh435.5 million.

Speaking during the annual president’s dinner on the same day, chief guestJohn Mosonik urged the built environment professionals to integrate Artificial Intelligence (AI) into construction.

“AI is increasingly becoming a cornerstone for sustainable urbanisation. By integrating AI-driven analytics and technologies like Building Information Modeling (BIM), we can significantly enhance resource efficiency and reduce waste in construction. For instance, through Life Cycle Assessments (LCA), AI monitors water and energy consumption while optimising material use, contributing to a more sustainable future,” said Mosonik.

“Smart cities around the globe provide excellent case studies for leveraging AI. In Songdo, South Korea, a truck-free waste management system powered by AI reduces emissions and operational costs. Similarly, Waymo’s autonomous vehicle fleet in the US exemplifies how AI can optimise urban transportation systems, reducing carbon emissions and enhancing air quality.”