Who Owns Whom

The Construction Sector in Nigeria

The Construction Industry in Nigeria 2016

Carole Veitch | Nigeria | 01 March 2016

The Construction Industry in Nigeria 2015

Carole Veitch | Nigeria | 05 June 2015

The Construction Industry in Nigeria 2015

Carole Veitch | Nigeria | 27 April 2015

The Construction Industry in Nigeria 2014

Carole Veitch | Nigeria | 29 May 2014

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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.

Introduction

This report focuses on the Construction industry and Infrastructure Development in the Federal Republic of Nigeria. The US$16bn sector has been earmarked for massive investment and is widely touted to become the fastest-growing Building and Construction industry in the world by 2020. Described as an "Infrastructure and Jobs Budget", President Muhammadu Buhari's ambitious ? 6.08trillion (US$30.1bn) budget for the 2016 fiscal year seeks to triple investment spending in a bid to stimulate economic growth. While this bodes well for Nigeria’s construction industry, funding challenges remain inextricably linked to the collapse of the crude oil price, which breached the US$30 per barrel threshold in January 2016, before recovering marginally.

Strengths

• Nigeria has emerged as the biggest construction market on the African continent and is one of Africa’s largest FDI markets.
• Nigeria, Africa’s largest economy, is a strategic West African trade hub and is endowed with an abundance of natural resources, including substantial reserves of oil and natural gas.
• Nigeria’s construction industry serves all sectors of the Nigerian economy and is a key driver of socio-economic development, providing shelter, employment and infrastructural development.
• Positive reforms have been implemented to improve access to home loans and long term finance.

Weaknesses

• Foreign construction companies are generally awarded large projects, at the expense of indigenous contractors.
• Regulatory oversight is lacking, notably in the informal construction sector, where building regulations and standards are commonly flouted. Building collapses are not an uncommon occurrence.
• The cost of inputs, particularly, electricity, fuel, imported building materials and construction equipment is extremely high.
• The industry’s over-reliance on public sector projects renders contractors highly exposed to inefficiencies at both Federal and State level. These include a high level of bureaucracy, project implementation delays, funding shortfalls, as well as late payment or non-payment.
• There is a high level of corruption, tender fraud and bribery.
• There is a skills deficit in the sector and workmanship is commonly sub-standard.

Opportunities

• Construction opportunities offered by the Economic Community of West African States.
• New building technologies, including Green Building techniques and renewable energy projects.
• The diversification of the Nigerian economy presents multiple opportunities for the construction sector.
• The prioritisation of integrated infrastructure development, with the implementation of Nigeria’s 30-year National Integrated Infrastructure Master Plan (NIIMP). Public-private-partnerships (PPPs) will present a wide range of opportunities.
• The urbanisation of Nigeria’s burgeoning population, together with the expanding middle class, will continue to drive demand in both the residential and non-residential segments.

Threats

• A sustained decline in commodity prices; notably the downward pressure on crude oil, would continue to impact negatively on the Nigerian economy.
• Further devaluation of the Nigerian Naira.
• Increasing competition from both foreign and regional construction companies poses a threat to indigenous contractors.
• The escalation of geo-political tensions.
• The escalation of sectarian violence and the destabilisation of the country.
• The weakening of both domestic and global financial markets.

Outlook

Construction Industry Forecast President Buhari’s bold 2016 National Budget has been widely welcomed by stakeholders in the construction sector who generally view it as a robust endorsement of the nation’s infrastructure development vision. However, with analysts predicting that oil prices will remain weak for the duration of 2016, some stakeholders remain sceptical about how the Nigerian government will fund its ambitious National Integrated Infrastructure Master Plan. At a regional level, the harmonisation of infrastructure development laws across African countries is expected to facilitate greater collaboration in cross-border infrastructure development projects. Macroeconomic Outlook In the face of slower GDP growth, rising inflation and a weakening currency, President Buhari has surprised many economists by proposing a record Budget that aims to stimulate economic growth through increased expenditure. However, the oil price remains the ever-present ‘elephant in the room’ and analysts say that the Buhari administration will need to strike a balance between austerity and expenditure if the budget of the African power-house is to balance. They reiterate that the diversification of the Nigerian economy away from oil will need to be addressed as an urgent priority. Political Outlook Although decisive action has been taken against the Islamic State’s West Africa Province, Boko Haram, acts of terror continue to destabilise Nigeria and its neighbours. Moreover, threats of a resurgence of hostilities in Nigeria’s oil-producing Niger Delta have intensified. Analysts warn that the Buhari administration will need to act boldly to tackle the sectarian violence that has destabilised national security. Furthermore, a tough stance needs to be taken to root out the scourge of corruption that continues to undermine the nation.

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The Construction Industry in Nigeria 2016

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Industry Landscape

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The Construction Industry in Nigeria 2015-06-05

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The Construction Industry in Nigeria 2015-04-27

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The Construction Industry in Nigeria 2014-05-29

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Table of Contents

[ Close ]
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

Introduction

This report focuses on the Construction sector in the Federal Republic of Nigeria and also examines Infrastructure Development in the West African nation. The country’s construction industry, which has a current nominal value of approximately US$16bn, plays a strategic role in Nigeria’s Transformation Agenda and Vision 2020 strategy as it supports all sectors of the economy and serves as an enabler of social and economic development. Although investor confidence in Africa’s largest economy has strengthened following the victory of General Muhammadu Buhari of the All Progressives Congress (APC) in Nigeria’s 2015 Presidential Election, stakeholders caution that the country remains highly exposed to factors that could significantly undermine the socio-economic and socio-political security of the nation. Just days before the inauguration of President-elect Buhari on 29 May 2015, disgruntled petroleum wholesalers imposed a fuel embargo on the nation, effectively crippling Africa’s largest oil producer. The incoming administration has lambasted the outgoing government over its handling of the crisis, accusing the Jonathan administration of "sabotage". As Nigeria’s new government takes the reins, their management of the troubled oil and gas sector is expected to be the focus of particularly close scrutiny.

Strengths

• Nigeria has emerged as the biggest construction market on the African continent and is one of Africa’s largest FDI markets.
• Nigeria, Africa’s largest economy, is a strategic West African trade hub and is endowed with an abundance of natural resources, including substantial reserves of oil and natural gas.
• Nigeria’s construction industry serves all sectors of the Nigerian economy and is a key driver of socio-economic development, providing shelter, employment and infrastructural development.
• Positive reforms have been implemented to improve access to home loans and long term finance.

Weaknesses

• Foreign construction companies are generally awarded large projects, at the expense of indigenous contractors.
• Regulatory oversight is lacking, notably in the informal construction sector, where building regulations and standards are commonly flouted. Building collapses are not an uncommon occurrence.
• The cost of inputs, particularly, electricity, fuel, imported building materials and construction equipment is extremely high.
• The industry’s over-reliance on public sector projects renders contractors highly exposed to inefficiencies at both Federal and State level. These include a high level of bureaucracy, project implementation delays, funding shortfalls, as well as late payment or non-payment.
• There is a high level of corruption, tender fraud and bribery.
• There is a skills deficit in the sector and workmanship is commonly sub-standard.

Opportunities

• Construction opportunities offered by the Economic Community of West African States.
• New building technologies, including Green Building techniques and renewable energy projects.
• The diversification of the Nigerian economy presents multiple opportunities for the construction sector.
• The prioritisation of integrated infrastructure development, with the implementation of Nigeria’s 30-year National Integrated Infrastructure Master Plan (NIIMP). Public-private-partnerships (PPPs) will present a wide range of opportunities.
• The urbanisation of Nigeria’s burgeoning population, together with the expanding middle class, will continue to drive demand in both the residential and non-residential segments.

Threats

• A sustained decline in commodity prices; notably the downward pressure on crude oil, would continue to impact negatively on the Nigerian economy.
• Increasing competition from both foreign and regional construction companies poses a threat to indigenous contractors.
• The devaluation of the Nigerian Naira.
• The escalation of geo-political tensions.
• The escalation of sectarian violence and the destabilisation of the country.
• The spread of Ebola across West Africa and a possible resurgence of the disease in Nigeria.
• The weakening of both domestic and global financial markets.

Outlook

Construction Industry Forecast Although the specifics of the Buhari administration’s economic blueprint are yet to be revealed, the government in-waiting has been vocal in its commitment to infrastructure development. Analysts say that if foreign investment is to increase, the incoming administration will need to deliver on its election promises and manage resources more effectively, while creating an enabling environment for economic activities to flourish. Notwithstanding the challenging operating environment, opportunities for contractors remain plentiful in Africa’s largest economy, particularly in the field of civil construction. Stakeholders believe that construction companies will continue to reap high rewards in this high risk environment, as Nigeria’s National Integrated Infrastructure Master Plan is rolled out. Macroeconomic Outlook The recent fuel crisis in Nigeria brought the country to a tipping point and revealed the Achilles’ heel of the West African giant. Analysts say that if further crises in the energy sector are to be averted, the new Buhari administration will need to act swiftly to overhaul the oil sector. Given that Nigeria remains highly exposed to currency and commodity price volatility, analysts reiterate that the diversification of the Nigerian economy will need to be accelerated to mitigate the risks inherent in oil price volatility. The Nigerian Stock Exchange responded favourably to the prospect of a new leader at the helm and analysts generally believe that the positive market sentiment augers well for Nigeria. Prior to taking office, President-elect Buhari affirmed the commitment of his party to the implementation of strategies, policies and visions that will create an enabling environment to allow business to flourish, while further liberalising and diversifying the economy. However, as the impact of the weaker oil price, rising interest rates and the devaluation of the naira ripples through the economy, it is evident that the Buhari administration will have to contend with significant challenges. Political Outlook Over the years, dysfunctional governance, corruption and political cronyism have ravaged Nigeria. Many analysts warn that the country is unlikely to emerge from the quagmire in which it currently finds itself, unless bold measures are implemented to tackle the scourge of corruption. In addition to focusing on political reforms that promote transparency and inclusive governance, the Buhari administration will need to address the sectarian violence that has destabilised the northern half of Nigeria. President Buhari will be expected to adopt a tough stance on the security threats facing Nigeria and its neighbours, particularly in light of the recent rapprochement between Islamic State and Boko Haram, the Islamic State’s West Africa Province (ISWAP).

The Construction Industry in Nigeria 2015

Full Report

R 1 900.00(ZAR) estimated $99.65 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 69.76 (USD)*

Historical Reports

The Construction Industry in Nigeria 2016-03-01

R 1 900.00(ZAR) estimated $99.65 (USD)*

View Report Add to Cart

The Construction Industry in Nigeria 2015-04-27

R 1 900.00(ZAR) estimated $99.65 (USD)*

View Report Add to Cart

The Construction Industry in Nigeria 2014-05-29

R 1 900.00(ZAR) estimated $99.65 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
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 15
4.1. Local 15
4.1.1. Corporate Actions 19
4.1.2. Regulations and Government Programmes 20
4.1.3. Opportunities for the Construction Industry 22
4.1.3.1. Transport 22
4.1.3.2. Energy/Power 25
4.1.3.3. Water Supply and Treatment 26
4.1.3.4. Healthcare Facilities 27
4.1.3.5. Education 27
4.1.3.6. Telecommunications 27
4.1.3.7. Residential Building 28
4.1.3.8. Commercial 29
4.1.3.9. Retail 29
4.1.3.10. Hospitality 30
4.1.3.11. Mining and Industrial 31
4.2. Continental 32
4.3. International 35
5. INFLUENCING FACTORS 37
5.1. Economic Environment 37
5.1.1. General 37
5.1.2. Effects on the Construction Sector 40
5.2. Socio-Political Environment 40
5.3. Infrastructure Deficit 42
5.3.1. Government Infrastructure Programme Spend 43
5.3.2. Foreign Direct Investment (FDI) 43
5.3.3. Private Sector Investment 44
5.3.4. Public Private Partnerships (PPP) 44
5.4. Urbanisation 44
5.5. Local Content 45
5.6. Corruption 45
5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 45
5.8. Input Costs 46
5.9. Cyclicality 47
5.10. Health and Safety Concerns 47
5.11. Information Technology 47
5.12. Technology 48
5.13. Labour Resources 49
5.13.1. Training and Skills Development 50
5.13.2. Licensing 50
5.13.3. Skills Shortages 51
5.13.4. Opportunities for Foreign Professionals 51
5.14. Environmental Concerns 51
6. COMPETITION 53
6.1. Barriers to Entry 54
6.2. Public Procurement and the Tendering Process 55
6.3. Research & Development (R&D) and Innovation 55
6.3.1. Research and Development (R&D) 55
6.3.2. Innovation 55
7. SWOT ANALYSIS 56
8. OUTLOOK 57
8.1. Construction Industry Forecast 57
8.2. Macroeconomic Outlook 58
8.3. Political Outlook 58
9. INDUSTRY ASSOCIATIONS 59
10. REFERENCES 60
10.1. Publications 60
10.2. Websites 61
APPENDIX 1 63
List of Institutions Offering Building Qualifications in Nigeria 63
COMPANY PROFILES 64
ARAB CONTRACTORS OSMAN AHMED OSMAN & CO 64
AURECON SOUTH AFRICA (PTY) LTD 68
BRUNELLI CONSTRUCTION COMPANY (NIGERIA) LTD 72
BUILDSTRUCT NIGERIA LTD 75
C&C CONSTRUCTION COMPANY LTD 76
CAPPA & D'ALBERTO PLC 78
CCECC NIGERIA LTD 81
CMB BUILDING MAINTENANCE & INVESTMENT COMPANY LTD 82
COSTAIN WEST AFRICA PLC 84
DANTATA & SAWOE CONSTRUCTION COMPANY (NIGERIA) LTD 87
DELATTRE BEZONS NIGERIA LTD 89
DUTUM COMPANY LTD 91
EL-ALAN CONSTRUCTION COMPANY (NIGERIA) LTD 93
G CAPPA PLC 95
GODSTAR ENGINEERING COMPANY LTD 100
GROUP FIVE POWER PROJECTS LTD (NIGERIA) 102
HFP ENGINEERING (NIGERIA) LTD 103
HITECH CONSTRUCTION COMPANY LTD 105
ITB NIGERIA LTD 106
JULIUS BERGER NIGERIA PLC 108
LEE ENGINEERING & CONSTRUCTION COMPANY LTD 111
MONIER CONSTRUCTION COMPANY (NIGERIA) LTD 113
PRODECO ENGINEERING LTD 115
PW NIGERIA LTD 117
REYNOLDS CONSTRUCTION COMPANY NIGERIA LTD 119
SAFKO CONSTRUCTION COMPANY NIGERIA LTD 121
SETRACO NIGERIA LTD 122
STEMCO LTD 124
TECHNOVA CONSTRUCTION NIGERIA LTD 125

Introduction

This report focuses on the Construction sector in the Federal Republic of Nigeria and also examines Infrastructure Development in the West African nation. Since its economy was rebased in April 2014, Nigeria has emerged as Africa’s largest construction and infrastructure market. The country’s construction industry, which has a current nominal value of approximately US$16bn, plays a strategic role in Nigeria’s Transformation Agenda and Vision 2020 strategy as it supports all sectors of the economy and serves as an enabler of social and economic development. Although investor confidence in Africa’s largest economy has strengthened following the victory of General Muhammadu Buhari of the All Progressives Congress (APC) in Nigeria’s 2015 Presidential Election, stakeholders caution that the country remains highly exposed to factors that could significantly undermine the socio-economic and socio-political security of the nation. Key concerns include the weaker crude oil price, a possible resurgence of Ebola in the country and the threat posed by the militant jihadi group, Boko Haram, which recently rebranded and is now known as Islamic State’s West Africa Province (ISWAP). Building safety is also in the spotlight and Nigeria’s construction industry remains under global scrutiny, following the collapse of a six-story guesthouse at the Synagogue Church of All Nations in Lagos on 12 September 2014, which claimed the lives of 116 people.

Strengths

• Nigeria has emerged as the biggest construction market on the African continent and is one of Africa’s largest FDI markets.
• Nigeria, Africa’s largest economy, is a strategic West African trade hub and is endowed with an abundance of natural resources, including substantial reserves of oil and natural gas.
• Nigeria’s construction industry serves all sectors of the Nigerian economy and is a key driver of socio-economic development, providing shelter, employment and infrastructural development.
• Positive reforms have been implemented to improve access to home loans and long term finance.

Weaknesses

• Foreign construction companies are generally awarded large projects, at the expense of indigenous contractors.
• Regulatory oversight is lacking, notably in the informal construction sector, where building regulations and standards are commonly flouted. Building collapses are not an uncommon occurrence.
• The cost of inputs, particularly, electricity, fuel, imported building materials and construction equipment is extremely high.
• The industry’s over-reliance on public sector projects renders contractors highly exposed to inefficiencies at both Federal and State level. These include a high level of bureaucracy, project implementation delays, funding shortfalls, as well as late payment or non-payment.
• There is a high level of corruption, tender fraud and bribery.
• There is a skills deficit in the sector and workmanship is commonly sub-standard.

Opportunities

• Construction opportunities offered by the Economic Community of West African States.
• New building technologies, including Green Building techniques and renewable energy projects.
• The diversification of the Nigerian economy presents multiple opportunities for the construction sector.
• The prioritisation of integrated infrastructure development, with the implementation of Nigeria’s 30-year National Integrated Infrastructure Master Plan (NIIMP). Public-private-partnerships (PPPs) will present a wide range of opportunities.
• The urbanisation of Nigeria’s burgeoning population, together with the expanding middle class, will continue to drive demand in both the residential and non-residential segments.

Threats

• A sustained decline in commodity prices; notably the downward pressure on crude oil, would continue to impact negatively on the Nigerian economy.
• Increasing competition from both foreign and regional construction companies poses a threat to indigenous contractors.
• The devaluation of the Nigerian Naira.
• The escalation of geo-political tensions.
• The escalation of sectarian violence and the destabilisation of the country.
• The spread of Ebola across West Africa and a possible resurgence of the disease in Nigeria.
• The weakening of both domestic and global financial markets.

Outlook

Construction Industry Forecast The SCOAN tragedy has shaken the foundations of Nigeria’s construction sector. While stakeholders are reluctant to pre-empt the outcome of the Coroner’s Inquest into the cause of the deadly building collapse, many role players in the industry have called for more rigorous oversight of the sector and for tough action to be taken against contractors who violate construction regulations. They warn that if local construction companies fail to rebuild confidence in the industry, they will continue to lose market-share to larger foreign contractors. Although infrastructure development is high on the Burhari administration’s agenda, fiscal constraints are expected to rein in government expenditure in the short-term. However, if the incoming administration is able to deliver on its election promises to manage resources more effectively for infrastructure development, while creating an enabling environment for economic activities to flourish, foreign investment is expected to rise. Opportunities for contractors remain plentiful in Africa’s largest economy, particularly in the field of civil construction. Despite the oil price plunge and the threats posed by Ebola and Boko Haram, analysts believe that players in the sector will continue to reap high rewards in this high risk environment as Nigeria’s National Integrated Infrastructure Master Plan is rolled-out. Macroeconomic Outlook The Nigerian economy remains highly exposed to currency and commodity price volatility. Although economic growth has remained relatively robust and inflation has stayed at acceptable levels during the course of 2014 and in the first quarter of 2015, analysts caution that the impact of the weaker oil price, rising interest rates and the devaluation of the naira is yet to ripple through the economy. Analysts further suggest that the diversification of Nigeria’s economy needs to be accelerated to mitigate the risks inherent in oil price volatility. While specific details of the new Nigerian administration’s economic blueprint are yet to be revealed, General Buhari has reiterated that his government intends to implement strategies, policies and visions that will create an enabling environment to allow business to flourish, while further liberalising and diversifying the economy. The Nigerian Stock Exchange has responded favourably to the election of General Buhari and analysts generally believe that the positive market sentiment augers well for the Nigerian economy. Political Outlook Many analysts believe that the sectarian violence that has destabilised the northern half of Nigeria has been compounded by the Jonathan administration’s ineffective leadership. The incoming administration of General Buhari will be expected to adopt a tough stance on the security threats facing Nigeria and its neighbours, particularly in light of the recent rapprochement between Boko Haram, or the Islamic State’s West Africa Province (ISWAP) and Islamic State.

The Construction Industry in Nigeria 2015

Full Report

R 1 900.00(ZAR) estimated $99.65 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 69.76 (USD)*

Historical Reports

The Construction Industry in Nigeria 2016-03-01

R 1 900.00(ZAR) estimated $99.65 (USD)*

View Report Add to Cart

The Construction Industry in Nigeria 2015-06-05

R 1 900.00(ZAR) estimated $99.65 (USD)*

View Report Add to Cart

The Construction Industry in Nigeria 2014-05-29

R 1 900.00(ZAR) estimated $99.65 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
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 15
4.1. Local 15
4.1.1. Corporate Actions 18
4.1.2. Regulations and Government Programmes 18
4.1.3. Opportunities for the Construction Industry 20
4.1.3.1. Transport 20
4.1.3.2. Energy/Power 23
4.1.3.3. Water Supply and Treatment 25
4.1.3.4. Healthcare Facilities 25
4.1.3.5. Education 26
4.1.3.6. Telecommunications 26
4.1.3.7. Residential Building 26
4.1.3.8. Commercial 27
4.1.3.9. Retail 27
4.1.3.10. Hospitality 28
4.1.3.11. Mining and Industrial 29
4.2. Continental 30
4.3. International 32
5. INFLUENCING FACTORS 34
5.1. Economic Environment 34
5.1.1. General 34
5.1.2. Effects on the Construction Sector 36
5.2. Socio-Political Environment 37
5.3. Infrastructure Deficit 39
5.3.1. Government Infrastructure Programme Spend 39
5.3.2. Foreign Direct Investment (FDI) 40
5.3.3. Private Sector Investment 41
5.3.4. Public-Private Partnerships (PPP) 41
5.4. Urbanisation 41
5.5. Local Content 42
5.6. Corruption 42
5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 42
5.8. Input Costs 44
5.9. Cyclicality 44
5.10. Health and Safety Concerns 44
5.11. Information Technology 45
5.12. Technology 45
5.13. Labour Resources 47
5.13.1. Training and Skills Development 47
5.13.2. Licensing 48
5.13.3. Skills Shortages 48
5.13.4. Opportunities for Foreign Professionals 48
5.14. Environmental Concerns 49
6. COMPETITION 50
6.1. Barriers to Entry 51
6.2. Public Procurement and the Tendering Process 52
6.3. Research & Development (R&D) and Innovation 52
6.3.1. Research and Development (R&D) 52
6.3.2. Innovation 52
7. SWOT ANALYSIS 53
8. OUTLOOK 54
8.1. Construction Industry Forecast 54
8.2. Macroeconomic Outlook 55
8.3. Political Outlook 55
9. INDUSTRY ASSOCIATIONS 56
10. REFERENCES 57
10.1. Publications 57
10.2. Websites 58
APPENDIX 1 60
List of Institutions Offering Building Qualifications in Nigeria 60
COMPANY PROFILES 61
Arab Contractors Osman Ahmed Osman & Co 61
Aurecon South Africa (Pty) Ltd 64
Brunelli Construction Company (Nigeria) Ltd 67
Buildstruct Nigeria Ltd 70
C&C Construction Company Ltd 71
Cappa & D'Alberto Plc 72
CCECC Nigeria Ltd 74
CMB Building Maintenance & Investment Company Ltd 75
Costain West Africa Plc 77
Delattre Bezons Nigeria Ltd 80
Dutum Company Ltd 82
G Cappa Plc 84
Godstar Engineering Company Ltd 89
Group Five Power Projects Ltd (Nigeria) 90
HFP Engineering (Nigeria) Ltd 91
Hitech Construction Company Ltd 93
ITB Nigeria Ltd 94
Julius Berger Nigeria Plc 96
Lee Engineering & Construction Company Ltd 99
Prodeco Engineering Ltd 101
PW Nigeria Ltd 102
Reynolds Construction Company Nigeria Ltd 104
Safko Construction Company Nigeria Ltd 106
Setraco Nigeria Ltd 107
STEMCO Ltd 109
Technova Construction Nigeria Ltd 110

Introduction

This report focuses on the infrastructure industry in Africa’s largest economy, the Federal Republic of Nigeria. With a current nominal value of approximately US$12.5bn, Nigeria’s formal Building and Construction sector has emerged as a key industry, serving all sectors of the Nigerian economy. As an enabler of social and economic development, the construction industry has a strategic role to fulfil in reshaping the West African nation. The complex and multi-faceted sector comprises indigenous, indigenised and international companies that operate primarily in the General Building, Industrial, Commercial Building and Heavy Civil Construction segments, although the oil and gas sector is providing an increasing number of opportunities. Of concern to stakeholders is the unregulated informal construction sector which has been blamed for numerous building collapses.

Strengths

• Nigeria is Africa’s 2nd largest FDI market.
• Nigeria is Africa’s largest economy. It is a strategic trade hub in West Africa and is endowed with an abundance of natural resources, including substantial reserves of oil and natural gas.
• Positive reforms have been implemented to improve access to home loans and long term finance.
• The construction industry serves all sectors of the Nigerian economy.
• The sector is a key driver of socio-economic development, providing shelter, employment and infrastructural development.

Weaknesses

• Corruption, tender fraud and bribery.
• In the informal construction sector building standards are violated, sub-standard materials are used and building collapses are a regular occurrence.
• Lack of enforcement of regulations.
• Reliant to a large extent on projects in the public sector and is thus negatively influenced by inefficiencies at Federal and State level.
• Skills shortage, particularly civil engineers.
• The industry is dominated by foreign companies, at the expense of indigenous companies.

Opportunities

• Green Building techniques and technologies, including renewable energy projects.
• Nigeria’s 30-year National Integrated Infrastructure Master Plan (NIIMP), which came into effect in 2014.
• Nigeria’s burgeoning population of around 175 million people is becoming rapidly urbanised.
• Public Private Partnerships because of the high demand for infrastructure.
• Technological innovations such as 3D-printing building technologies.
• The growing middle class will continue to drive the construction boom in the residential and non-residential segments.

Threats

• Downward pressure on the oil price, which would impact negatively on Nigeria’s economy and ripple through to the construction sector.
• Failure to implement proposed public sector infrastructure development projects could cripple the civil construction sector.
• Increasing funding shortfalls, non-payment or tardy settlement by government departments which will lead to further job losses and could force companies to close down.
• Sectarian violence has created a climate of political uncertainty that could destabilise the country ahead of the 2015 Elections. Security concerns have caused companies to withdraw from the northern states.

Outlook

6.1. Construction Industry Forecast The construction industry is building the new Nigeria and paving the Vision 2020 path. Stakeholders in the sector suggest that the major construction companies will be building bridges, rehabilitating runways, roads and railways, dredging ports and designing power stations. The sector’s medium-sized companies are expected to focus on lucrative contracts to build new shopping malls, hotels and resorts to cater for the influx of business travellers, while smaller contractors are likely to be building houses for first time homeowners who are now able to obtain mortgage bonds. However, Construction activity north of Abuja is expected to remain subdued. Analysts fear that the infrastructural divide between Nigeria’s two halves will widen even further. 6.2. Macroeconomic Outlook Although Nigeria’s economy has remained robust in recent years, declining oil exports saw Nigeria’s foreign-exchange reserves contract by 13% in May 2014, with the Central Bank having to sell dollars to prop up the local currency. Analysts fear that it may become increasingly difficult to maintain the stability of the Naira ahead of the election on 14 February 2015. Although projected GDP growth for 2014 has increased marginally to a respectable 6.75%, analysts do not believe that the country will be able to deliver the jobs necessary to reverse the rising rate of joblessness. ? 6.3. Political Outlook The abduction of 276 schoolgirls by Boko Haram, compounded by a spate of deadly bombings and attacks, are grim reminders of the challenges faced by the population of Nigeria. The escalation in sectarian violence has created a climate of political uncertainty and uneasiness. Analysts warn that the political situation is precarious and that opponents of President Goodluck Jonathan could further destabilise the country ahead of the 2015 Elections.

The Construction Industry in Nigeria 2014

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Table of Contents

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PAGE
1. INTRODUCTION 1
2. SIZE AND STRUCTURE OF THE INDUSTRY 1
2.1. Geographic Position 1
2.2. Key Cities and Regions 2
2.3. Size of the Industry 2
2.3.1. Key Indigenous and Foreign Players 3
3. STATE OF THE INDUSTRY 8
3.1. Local 8
3.1.1. Corporate Actions 9
3.1.2. Regulations 9
3.1.3. Opportunities for the Construction Industry 10
3.1.3.1. Transport 10
3.1.3.2. Energy/Power 10
3.1.3.3. Water Supply and Treatment 11
3.1.3.4. Healthcare 11
3.1.3.5. Education 11
3.1.3.6. Telecommunications 11
3.1.3.7. Residential Building 11
3.1.3.8. Commercial 12
3.1.3.9. Retail 12
3.1.3.10. Hotels and Tourism 12
3.1.3.11. Mining and Industrial 12
3.2. Continental 13
3.3. International 13
4. INFLUENCING FACTORS 14
4.1. Economic Environment 14
4.1.1. General 14
4.1.2. Effects on the Construction Sector 15
4.2. Socio-Political Environment 15
4.3. Infrastructure Deficit 15
4.3.1. Government Infrastructure Programme Spend 15
4.3.2. Foreign Direct Investment (FDI) 15
4.3.3. Private Sector Investment 16
4.3.4. Public Private Partnerships 16
4.4. Urbanisation 16
4.5. Local Content 16
4.6. Corruption 17
4.7. Industry Supply Chain 17
4.7.1. Capacity, Quality and Security of Supply 17
4.8. Industry Specific Issues 17
4.8.1. General Trends 17
4.8.2. Input Costs 17
4.8.3. Cyclicality 17
4.8.4. Health and Safety 18
4.9. Competition 18
4.9.1. Barriers to Entry 18
4.9.2. Public Procurement and the Tendering Process 18
4.10. Labour Resources 18
4.10.1. Licensing 18
4.10.2. Skills Shortages 19
4.10.3. Opportunities for Foreign Professionals 19
4.11. Technology, Research & Development (R&D) and Innovation 19
4.11.1. Technology 19
4.11.2. Research and Development (R&D) 19
4.11.3. Innovation 20
4.12. Environmental Concerns 20
5. SWOT ANALYSIS 21
6. OUTLOOK 21
6.1. Construction Industry Forecast 21
6.2. Macroeconomic Outlook 21
6.3. Political Outlook 22
7. INDUSTRY ASSOCIATIONS 22
8. REFERENCES 22
8.1. Publications 22
8.2. Websites 23
APPENDIX 1 24
List of Institutions Offering Building in Nigeria 24
COMPANY PROFILES 25
ARAB CONTRACTORS OSMAN AHMED OSMAN & CO 25
AURECON SOUTH AFRICA (PTY) LTD 27
BRUNELLI CONSTRUCTION COMPANY (NIGERIA) LTD 30
BUILDSTRUCT NIGERIA LTD 32
C&C CONSTRUCTION COMPANY LTD 33
CAPPA & D'ALBERTO PLC 34
CCECC NIGERIA LTD 36
CMB BUILDING MAINTENANCE & INVESTMENT COMPANY LTD 37
COSTAIN WEST AFRICA PLC 38
DELATTRE BEZONS NIGERIA LTD 40
DUTUM COMPANY LTD 41
G CAPPA PLC 42
GODSTAR ENGINEERING COMPANY LTD 46
GROUP FIVE POWER PROJECTS LTD (NIGERIA) 47
HFP ENGINEERING (NIGERIA) LTD 48
HITECH CONSTRUCTION COMPANY LTD 50
ITB NIGERIA LTD 51
JULIUS BERGER NIGERIA PLC 52
LEE ENGINEERING & CONSTRUCTION COMPANY LTD 54
PRODECO ENGINEERING LTD 56
PW NIGERIA LTD 57
REYNOLDS CONSTRUCTION COMPANY NIGERIA LTD 58
SAFKO CONSTRUCTION COMPANY NIGERIA LTD 59
SETRACO NIGERIA LTD 60
STEMCO LTD 61
TECHNOVA CONSTRUCTION NIGERIA LTD 62