The Nigerian construction industry is expected to register an average annual growth of 3.1 per cent from 2025 to 2028 with the right investment in the nation’s energy sector, according to a new report released by ResearchAndMarkets.com.
The growth trajectory would be supported by investment in electricity, transport, manufacturing, housing, and oil and gas sectors, the report said.
The industry’s growth will be supported by the N7.7 trillion ($9.1 billion) National Development Plan 2021-25, under which, the government sets out multilateral increases in the length of the total paved network, the country’s cargo handling capacity and aviation passenger traffic, and the percentage of road network under scheduled maintenance and repair.
Furthermore, the government aims to diversify total energy consumption towards renewable electricity, from 13 per cent (2015) to 23 per cent (2025) to 36 per cent (2030), under the Renewable Energy Master Plan (REMP).
The growth will also be supported by the “National Automotive Industry Development Plan” (NADIP) 2023-2033, pertaining to a target increase in Nigerian vehicles production, of which 30 per cent will be Electric Vehicles (EVs), generating one million jobs over the ten year-period.
Output has been revised down growth in the Nigerian construction industry from 2.8 per cent to 1.2 per cent in real terms, in 2024, owing to headwinds such as socio-political unrest, high inflation, rising interest rates, depreciation of the Nigerian naira, and rising external debt.
The Central Bank of Nigeria (CBN) has raised its monetary policy rate by 150 basis points, from 24.75 per cent in March to 26.25 per cent in May 2024; this is to curb inflation which reached a 28-year high of 33.69 per cent in April 2024, from 33.2 per cent in the month previously.
Furthermore, challenges in the oil sector, such as oil theft and attacks on facilities, pose major downside risks to the industry’s growth in the short term.
Despite these challenges, forecasted growth in 2024 is conducive to the government’s focus to address rising energy prices and slowing economic growth, tackled through an expansive 2024 Budget amassing expenditure of N27.5 trillion ($32.3 billion). Good p
Specifically, the budget includes capital expenditure of N7.7 trillion ($9.1 billion), an allocation of N548.6 billion ($922.2 million) for road construction, and N99 billion ($166.4 million) for housing development.
SOURCE: LEADERSHIP
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