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Construction in Nigeria: Key Trends and Opportunities to 2023

Construction in Nigeria: Key Trends and Opportunities to 2023

Summary

The Nigerian construction industry recovered in 2017 and 2018, after registering a gloomy performance in 2016. The industry registered growth of 1% and 2.3% in real terms in 2017 and 2018 respectively. This was supported by improvements in economic conditions, an increase in oil revenues and the government's investment in the development of overall infrastructure projects across the country. In the 2016 and 2017 budgets, the government allocated NGN1.7 trillion (US$5.6 billion) towards capital infrastructure development.

The industry is expected to expand over the forecast period (2019-2023), driven by the government's efforts to develop the country's housing and transport infrastructure. In January 2019, the government approved Executive Order 007 in order to boost private sector investment in the road construction projects in the country. The government's focus to cut down the housing deficit in the country by providing affordable housing to citizens will also drive the industry's growth over the forecast period. In the 2019 budget, the government proposed to allocate NGN30 billion (US$98.3 million) towards affordable housing under the National Housing Program. Improvements in consumer and investor confidence, along with developments in regional economic conditions, are expected to bode well for the industry's growth. Forecast-period growth will also be supported by ongoing urbanization and population growth.

The industry's output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 5.39% over the forecast period - up from 0.36% during the review period (2014-2018).

GlobalData's "Construction in Nigeria: Key Trends and Opportunities to 2023", report provides detailed market analysis, information and insights into the Nigerian construction industry, including -
- The Nigerian construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Nigerian construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

- GlobalData expects the infrastructure construction market to retain its leading position over the forecast period and account for 30.1% of the industry's total value in 2023, driven by the government's focus on developing the country's transport infrastructure. In August 2018, the government approved NGN348.6 billion (US$1.1 billion) for the road construction between Akwanga to Gombe by 2022-2023. Furthermore, in the 2019 budget, the government proposed to allocate NGN280.4 billion (US$917.7 million) for road infrastructure development across the country.
- Forecast-period growth in the energy and utilities construction market will be driven by government's focus on developing the country's renewable energy infrastructure. It aims to increase the contribution of renewable energy in the total energy mix from 15% in 2018 to 30% by 2030. The government plans to build the country's biggest power plant, the Mambilla hydropower project, to generate 3.1GW of electricity, with a total investment of NGN1.8 trillion (US$5.8 billion) by 2024.
- GlobalData expects the residential construction market to record a forecast-period CAGR of 10.87% in nominal terms, driven by the government's focus on providing housing to the country's middle- and low-income citizens. The government will supply 500,000 housing units in the country by 2023, and plans to invest NGN1 trillion (US$3.3 billion) under the Family Homes Fund (FHF) by 2023 to minimize the housing deficit. Furthermore, in October 2018, the government announced it will allocate NGN500 billion (US$1.6 billion) under the FHF over the next five years.
- The government is focusing on building special economic zones (SEZ) and industrial parks in the country to promote the manufacturing and exports sectors. In the 2019 budget, the government proposed to allocate NGN42 billion (US$137.4 million) for the development of SEZs and industrial parks in the country. The government will also provide NGN15 billion (US$49.1 million) in order to develop micro, small and medium scale enterprises (MSMEs) in the country in 2019.
- The total construction project pipeline in Nigeria - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at NGN123.2 trillion (US$403.1 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 55.1% of the pipeline value being in projects in the pre-execution and execution stages as of April 2019.

Scope

- This report provides a comprehensive analysis of the construction industry in Nigeria.
- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Nigeria, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants.

Reasons to buy

- Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using GlobalData's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.
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Construction in Nigeria: Key Trends and Opportunities to 2023
Published By :GlobalData
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