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The Construction Industry in Nigeria
The US$16bn formal sector, which contributed 3.67% to GDP in 2014, has been earmarked for massive investment and is expected to become the fastest growing Building and Construction industry in the world by 2020.
Opportunities and Challenges
Nigeria’s population is becoming increasingly urbanised and opportunities in the construction sector abound. Current statistics from the Federal Mortgage Bank of Nigeria (FMBN) indicate a housing deficit of 17 million units. The formation of the Nigeria Mortgage Refinance Company (NMRC), which is mandated to raise capital via the bond market, is expected to impact positively on the residential market, as is the government’s National Housing Policy and its National Urban Development Policy which aim to provide approximately 1 million new residential units per annum. There are concerns for the welfare of the sector, however, especially in light of the collapse of the crude oil price, which went below the US$30 per barrel threshold in January 2016. Compared to growth of 18.36% recorded in Q3 2014, the nominal value of the local construction sector grew by a much lower 5.34% year-on-year in Q3 2015. Added to this are challenges related to faulty design, the use of sub-standard building materials, inadequate structural reinforcement and poor workmanship. Stakeholders still urge the government to reduce the cost of obtaining necessary building permits, remove administrative bottlenecks and rid government agencies of corruption.
Construction in Nigeria details conditions in the local sector as well as market opportunities for construction companies in all sectors of the economy. It investigates government initiatives as well as recent developments and factors influencing the success of the sector. The report profiles 29 foreign and local construction companies, including the dominant Julius Berger Nigeria Plc, a majority Nigerian-owned private company that has a workforce of more than 18,000 people. Also profiled are numerous major foreign companies such as China Civil Engineering Construction Corporation (CCECC) and the Egyptian construction giant, Arab Contractors.