Nigeria’s construction industry is due to grow by 3.9% in 2021 after a 7.7% decline in 2021, according to economic analyst GlobalData. The fall was caused by Covid-19 restrictions and a drop in demand for oil and gas, which accounts for 65% of government revenues.
Nigeria’s construction market is due to increase 3.2% annually between 2022 and 2025, supported by state investment in the infrastructure and energy sector.
To oversee infrastructure investment, the government has created Infra-Co, a $2.7bn fund backed by the central bank, the Nigerian Sovereign Investment Authority and the Africa Finance Corporation.
Growth will also be helped by the 2021 Appropriation Bill, which provides a road map for the country’s post-Covid-19 economic recovery.
A third factor in the passage of a Petroleum Industry Bill (PIB), whcih cuts taxes and increases production ceilings.
Dhananjay Sharma, GlobalData analyst, said: “The PIB augurs well for the Nigerian economy in general and the construction sector in particular, given delays in implementing key legislative reforms that have compounded problems for the sector, which is still suffering under the weight of OPEC+ output cuts and the impact of Covid-19.
“Nigeria’s oil and gas construction projects have a combined value of $140bn, of which $89bn relates to projects in the pre-execution stages. If all projects do proceed as planned and spending is evenly distributed over the construction phase, annual spending for 2021 is expected to be $8.2bn and could reach $25bn in 2023.”