What Infrastructure Projects in Africa Actually Cost, and Why the Sticker Price Is Rarely the Whole Story

The number on the proposal is never the number you pay

Anyone who has priced out a power plant, a roadway, or a large concrete structure knows the first estimate is a starting point, not an answer. Materials, labor, permitting, and financing costs shift as a project moves from paper to ground. In markets across Africa, where supply chains and regulatory timelines vary widely by country, that gap between quoted cost and real cost tends to be wider than developers expect.

Ron Yeffet has managed and owned real estate and infrastructure projects across the United States, Israel, Italy, and Africa, including energy supply, power plants, and major roadway work. That range gives him a useful vantage point: costs that look normal in New York can behave very differently once a project crosses into a new country with its own labor market, currency, and approval process.

Where the real money goes

The obvious costs, land, materials, labor, are rarely where budgets get blown. The expensive surprises usually sit in three places.

Time on the calendar

Every month a project sits waiting on a permit, a customs clearance, or a financing signature is a month of carrying costs: interest, idle equipment, and staff who still need paying whether or not concrete is being poured. A delay that looks small on a schedule can be large on a balance sheet.

Currency and import exposure

Power plant components and specialized construction materials are often priced in a different currency than the one paying local labor and local suppliers. When that exchange rate moves during a multi-year build, it can change the math on a project that looked solid at signing.

Local coordination

Roadways and power infrastructure touch land rights, utilities, and existing communities in ways a single building rarely does. Getting agreement from all the parties who have a stake in the ground you’re building on takes real time and real budget, and it is easy to underprice at the start.

The advice that gets repeated and doesn’t hold up

Standard guidance tells developers to build in a contingency line, often 10 to 15 percent, and move on. That’s not wrong, but it treats cost overrun as a single risk instead of a series of different ones with different causes. A contingency built for material price swings doesn’t protect against a permitting delay, and a schedule buffer doesn’t protect against a currency shift. Lumping them into one padded number makes a budget look responsible without actually pricing the risks that are most likely to hit.

Ron Yeffet’s approach, based on work across several countries, is to separate cost risk by category rather than treat it as one line. Currency exposure, regulatory timeline, and local coordination each get sized on their own, because the driver behind each one is different and the fix for one doesn’t cover the others.

What to actually do about it

Price the calendar, not just the concrete. Before signing financing, estimate what a six-month delay costs in carrying charges alone. If that number is uncomfortable, the project needs a different financing structure, not a hope that the timeline holds.

Separate your currency exposure from your labor budget. If equipment or materials are priced in a foreign currency, model the project at a range of exchange rates, not just the one at signing. A project that only works at today’s rate is not stable enough to build.

Budget coordination as its own line item, with a name attached. Land rights, utility agreements, and community sign-off take staff time and often local counsel. Give that work its own budget and its own owner instead of folding it into “permitting” and hoping it’s covered.

Ask what the last project in that country actually cost versus its first estimate. A developer or partner who has built there before can tell you where their own numbers moved and why. If they can’t answer specifically, they haven’t built there enough to know.

Why this matters more outside familiar markets

A developer working only in one city can lean on years of pattern recognition to catch cost problems early. That shortcut disappears the moment a project moves to a new country. The real cost of infrastructure work in unfamiliar markets isn’t hidden in the contract. It’s hidden in the assumptions the contract was built on, and those assumptions are worth checking one at a time, not all at once under a single contingency number.