Following a difficult 2016 the Nigerian construction sector showed signs of stronger growth in the first half of 2017. The uptick in activity comes on the back of a low base, however, as the country’s first recession in 25 years affected private investment in real estate building and oil companies had to scale back investment plans due to lower global oil prices. The stabilisation of the naira, the utilisation of new contract structures and an increase in local suppliers are now helping to provide fertile ground for activity. While public sector tenders remain limited compared to the booming years of the 2000s, the increase of private development in the residential and commercial building segments offers promise. Nigeria’s real estate sector has traditionally been defined by an abundance of demand and relatively limited supply, whether in residential, commercial or retail space. Since 2015, however, the situation has changed for some segments. In the office market, for example, supply is beginning to catch up or even outstrip demand. The real estate sector continues to account for around 7% of GDP, but the return on investment for developers is far less than it was five years ago, as Nigeria’s first recession in 25 years hit in 2015. The government’s efforts to boost middle-income home ownership should bear fruit in the longer term.
This chapter contains an interview with Igbuan Okaisabor, CEO, Construction Kaiser.