Construction in Nigeria – Key Trends and Opportunities to 2022

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.

Scope

This report provides a comprehensive analysis of the construction industry in Nigeria. It provides:

  • Historical (2013-2017) and forecast (2018-2022) 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

Key Highlights

  • 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.
  • 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.
  • 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.
  • 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).
  • 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.

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.

Table of Contents

1 Executive Summary

2 Construction Outlook: At-a-glance

3 Latest News and Indicators

4 Key Drivers and Risks

4.1 Economic Performance

4.2 Political Environment

4.3 Demographics ...

1 Executive Summary

2 Construction Outlook: At-a-glance

3 Latest News and Indicators

4 Key Drivers and Risks

4.1 Economic Performance

4.2 Political Environment

4.3 Demographics

5 Construction Outlook

5.1 All Construction

5.1.1 Outlook

5.1.2 Project analytics

5.2 Commercial Construction

5.2.1 Outlook

5.2.2 Project analytics

5.3 Industrial Construction

5.3.1 Outlook

5.3.2 Project analytics

5.4 Infrastructure Construction

5.4.1 Outlook

5.4.2 Project analytics

5.5 Energy and Utilities Construction

5.5.1 Outlook

5.5.2 Project analytics

5.6 Institutional Construction

5.6.1 Outlook

5.6.2 Project analytics

5.7 Residential Construction

5.7.1 Outlook

5.7.2 Project analytics

6 Key Industry Participants

6.1 Contractors

6.2 Consultants

7 Appendix

7.1 What is this Report About?

7.2 Definitions

7.3 About GlobalData

7.4 About CIC

7.5 Disclaimer

List of Tables

Table 1: Nigeria, Key Economic Indicators

Table 2: Nigeria, Construction Output Value (nominal, NGN Billion)

Table 3: Nigeria, Construction Output Value (nominal, US$ Million)

Table ...

Table 1: Nigeria, Key Economic Indicators

Table 2: Nigeria, Construction Output Value (nominal, NGN Billion)

Table 3: Nigeria, Construction Output Value (nominal, US$ Million)

Table 4: Nigeria, Top Commercial Construction Projects by Value

Table 5: Nigeria, Top Industrial Construction Projects by Value

Table 6: Nigeria, Top Infrastructure Construction Projects by Value

Table 7: Nigeria, Top Energy and Utilities Construction Projects by Value

Table 8: Nigeria, Top Institutional Construction Projects by Value

Table 9: Nigeria, Top Residential and Mixed-Use Construction Projects by Value

Table 10: Nigeria, Key Contractors

Table 11: Nigeria, Key Consultants

Table 12: GlobalData Construction Market Definitions

Table 13: Construction Risk Index Ratings and Scores

List of Figures

Figure 1: Key Markets, Construction Output Growth Matrix and Risk Matrix

Figure 2: Nigeria, Construction Projects Pipeline by Sector (NGN Billion)

Figure 3: Nigeria, Construction ...

Figure 1: Key Markets, Construction Output Growth Matrix and Risk Matrix

Figure 2: Nigeria, Construction Projects Pipeline by Sector (NGN Billion)

Figure 3: Nigeria, Construction value add at constant 2010 prices (NGN Billion)

Figure 4: Nigeria, Construction Output Value (Real, US$ billion, 2017 prices and exchange rate)

Figure 5: Nigeria, Construction Output Value, Growth Matrix

Figure 6: Nigeria, Construction Output Value, by Sector (NGN Billion), 2013–2022

Figure 7: Nigeria, Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion), 2017–2022

Figure 8: Nigeria, Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 9: Nigeria, Commercial Construction Output by Project Type (NGN Billion), 2013–2022

Figure 10: Nigeria, Commercial Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 11: Nigeria, Commercial Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion)

Figure 12: Nigeria, Industrial Construction Output by Project Type (NGN Billion), 2013–2022

Figure 13: Nigeria, Industrial Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 14: Nigeria, Industrial Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion)

Figure 15: Nigeria, Infrastructure Construction Output by Project Type (NGN Billion), 2013–2022

Figure 16: Nigeria, Infrastructure Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 17: Nigeria, Infrastructure Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion)

Figure 18: Nigeria, Energy and Utilities Construction Output by Project Type (NGN Billion), 2013–2022

Figure 19: Nigeria, Energy and Utilities Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 20: Nigeria, Energy and Utilities Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion)

Figure 21: Nigeria, Institutional Construction Output by Project Type (NGN Billion), 2013–2022

Figure 22: Nigeria, Institutional Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 23: Nigeria, Institutional Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion)

Figure 24: Nigeria, Residential Construction Output by Project Type (NGN Billion), 2013–2022

Figure 25: Nigeria, Residential Construction Projects Pipeline, Value by Stage (NGN Billion)

Figure 26: Nigeria, Residential Construction Projects Pipeline, Projected Annual Spending by Stage (NGN Billion)

Figure 27: Nigeria, Headquarters of Key Contractors (% of Total Project Pipeline)

Figure 28: Nigeria, Headquarters of Foreign Contractors (% of Project Pipeline with Foreign Contractor)

Figure 29: Nigeria, Headquarters of Key Consultants (% of Total Project Pipeline)

Figure 30: Nigeria, Headquarters of Foreign Consultants (% of Project Pipeline with Foreign Consultants)

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