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The Infrastructure Industry in Nigeria
BY Carole Veitch
Nigeria
01 March 2016
R 2 040.00 (ZAR)  
estimated $ 144.67 (USD) *
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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.


Report Coverage


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.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Value Chain 2
2.2. Geographic Position 3
2.2.1. Key Regions and Cities 4
3. SIZE OF THE INDUSTRY 5
3.1. Key Local and Foreign Players 6
4. STATE OF THE INDUSTRY 16
4.1. Local 16
4.1.1. Corporate Actions 21
4.1.2. Regulations and Government Programmes 22
4.1.3. Opportunities for the Construction Industry 24
4.1.3.1. Transport 24
4.1.3.2. Energy/Power 27
4.1.3.3. Water Supply and Treatment 29
4.1.3.4. Healthcare Facilities 29
4.1.3.5. Education 30
4.1.3.6. Telecommunications 30
4.1.3.7. Residential Building 30
4.1.3.8. Commercial 32
4.1.3.9. Retail 32
4.1.3.10. Hospitality 33
4.1.3.11. Mining and Industrial 34
4.2. Continental 35
4.3. International 39
5. INFLUENCING FACTORS 41
5.1. Economic Environment 41
5.1.1. Effects on the Construction Sector 44
5.2. Socio-Political Environment 44
5.3. Infrastructure Deficit 46
5.3.1. Government Infrastructure Programme Spend 46
5.3.2. Foreign Direct Investment (FDI) 47
5.3.3. Private Sector Investment 47
5.3.4. Public Private Partnerships (PPP) 47
5.4. Urbanisation 48
5.5. Local Content 48
5.6. Corruption 48
5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 49
5.8. Input Costs 50
5.9. Cyclicality 50
5.10. Health and Safety Concerns 51
5.11. Information Technology 51
5.12. Technology 51
5.13. Labour Resources 53
5.13.1. Training and Skills Development 54
5.13.2. Licensing 54
5.13.3. Skills Shortages 55
5.13.4. Opportunities for Foreign Professionals 55
5.13.5. Environmental Concerns 55
6. COMPETITION 57
6.1. Barriers to Entry 58
6.2. Public Procurement and the Tendering Process 58
6.3. Research and Development (R&D) 59
6.4. Innovation 59
7. SWOT ANALYSIS 60
8. OUTLOOK 61
8.1. Construction Industry Forecast 61
8.2. Macroeconomic Outlook 62
8.3. Political Outlook 62
9. INDUSTRY ASSOCIATIONS 62
10. REFERENCES 63
10.1. Publications 63
10.2. Websites 65
APPENDIX 1 67
List of Institutions Offering Building Qualifications in Nigeria 67
COMPANY PROFILES 68
Arab Contractors Osman Ahmed Osman & Co 68
Aurecon South Africa (Pty) Ltd 72
Brunelli Construction Company (Nigeria) Ltd 76
Buildstruct Nigeria Ltd 79
C&C Construction Company Ltd 80
Cappa and D'Alberto Plc 82
CCECC Nigeria Ltd 85
CMB Building Maintenance & Investment Company Ltd 86
Costain West Africa Plc 88
Dantata & Sawoe Construction Company (Nigeria) Ltd 90
Delattre Bezons Nigeria Ltd 92
Dutum Company Ltd 94
El-Alan Construction Company (Nigeria) Ltd 96
G Cappa Plc 98
Godstar Engineering Company Ltd 103
Group Five Power Projects Ltd (Nigeria) 104
HFP Engineering (Nigeria) Ltd 105
Hitech Construction Company Ltd 107
ITB Nigeria Ltd 108
Julius Berger Nigeria Plc 110
Lee Engineering & Construction Company Ltd 113
Monier Construction Company (Nigeria) Ltd 116
Prodeco Engineering Ltd 118
PW Nigeria Ltd 120
Reynolds Construction Company Nigeria Ltd 122
Safko Construction Company Nigeria Ltd 124
Setraco Nigeria Ltd 125
STEMCO Ltd 127
Technova Construction Nigeria Ltd 128