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Facts & Figures: Construction in Nigeria – Key Trends and Opportunities to 2022 (GlobalData)

In real terms, the Nigerian construction industry recovered in 2017, after registering a gloomy performance in 2016 due to the economic recession. Weak construction activity in 2016 came primarily on the back of high inflation, rising unemployment, currency devaluation, high interest rates, low oil prices and reduced oil production, which forced the economy into recession; this reduced the pace of public and private sector investment in construction projects.


The industry, however, gained pace in 2017, supported by government efforts to accelerate the pace of economic growth through increased investment in infrastructure projects. Overall, the industry posted positive growth during the review period (2013–2017), registering a compound annual growth rate (CAGR) of 2.88% in real terms.


Over the forecast period (2018–2022), the government’s efforts to enhance transport and residential infrastructure will support the growth of the industry. The government’s aim to increase energy production capacity will support investments in energy infrastructure projects. The industry’s output value in real terms is expected to record a CAGR of 5.45% over the forecast period.


The overall expansion in the industry will be driven by the Economic Recovery and Growth Plan (ERGP) 2017–2020, under which the government aims to achieve sustained and inclusive economic growth. In line with its economic recovery plans, the government announced budget spending of NGN8.6 trillion (US$26.3 billion) for 2018 – 15.8% higher than the 2017 budget. Accordingly, the government allocated NGN2.4 trillion (US$7.4 billion) to capital expenditure, an increase of 28.2% compared to the 2017 budget.



Points of Note

  1. GlobalData expects the infrastructure construction market to retain its leading position over the forecast period, with 29.9% of the industry’s total value in 2022. In order to develop the country’s rail infrastructure, an agreement was signed in June 2016 between the government of Nigeria and China Civil Engineering Construction Company (CCECC) to construct a new coastal railway line, connecting Lagos in the south-west and Calabar in the south-east of the country. The total investment in the project is anticipated to be NGN3.6 trillion (US$11.1 billion), and is scheduled for completion in 2019.

  2. In April 2017, the government launched the ERGP 2017–2020 in order to support economic activity, create employment opportunities and engender economic diversification. According to the government, the total funding of NGN130.8 trillion (U$400.0 billion) is required to develop the country’s overall infrastructure by 2020 under the ERGP. Accordingly, the government plans to borrow NGN9.8 trillion (US$30.0 billion) between 2017 and 2020 to develop infrastructure projects in the country.

  3. GlobalData expects the energy and utilities construction market output to record a forecast-period CAGR of 18.88% in nominal terms. Under the National Renewable Energy Action Plan (NREAP), the government aims to generate 30% of the country’s total electricity consumption through renewable sources by 2030. As part of the country’s vision to develop renewable energy, the government awarded a contract to a consortium of Chinese state-owned construction companies in 2017 to construct the country’s largest hydroelectric power plant in the state of Taraba. The total investment for the 3,050MW hydroelectric power project is estimated at NGN1.9 trillion (US$5.8 billion) and is scheduled to be completed by 2023.

  4. GlobalData expects the residential construction market output to record a forecast-period CAGR of 10.82% in nominal terms. The government is focusing on developing affordable housing projects in order to address the country’s chronic housing shortage. Under the Family Homes Fund, the government plans to construct 2.0 million social housing units by 2020 through public-private partnerships (PPPs).

  5. The total construction project pipeline in Nigeria, as tracked by the Construction Intelligence Center (CIC), including all mega projects with a value above US$25 million, stands at NGN167.4 trillion (US$511.7 billion). The pipeline, which includes all projects from pre-planning to execution, is relatively well balanced, with projects in the early-stage accounting for 48.9% of the pipeline by value as of April 2018.


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