Rapid urbanisation in Abuja, Nigeria, drives infrastructure and real estate investment


Home to the national capital Abuja – one of the fastest-growing cities in Africa – the Federal Capital Territory (FCT) has risen to become a significant investment destination in recent years. Supported by rapid population growth, rising GDP and expanding household consumption, a wide offering of opportunities have arisen across construction, mining, agriculture, ICT and real estate. However, the region faces a number of bottlenecks to its continued development. While road and ICT infrastructure is robust, townships face underinvestment and many residents have been priced out of Abuja’s property market. Furthermore, local manufacturing production remains limited, leaving the territory dependent on costly imports to meet rising demand.

Nevertheless, the government is taking steps to overcome these challenges. At a national level there has been a rising emphasis on public-private partnerships (PPPs) to improve infrastructure. On a sub-national level the FCT authority, the FCT Administration (FCTA), has outlined plans to open new zones for development, and provide major upgrades to infrastructure and transportation.


The federal territory is supervised by the National Assembly and administered by the FCTA, which was created in 2004. The FCTA is headed by a minister appointed by the president; Muhammad Musa Bello has held the position since November 2015. The authority oversees seven secretariats devoted to education, transport, agriculture and rural development, health and human services, social development, legal services and area councils. It also funds agencies including the Abuja Metropolitan Management Council (AMMC) and the Federal Capital Development Authority (FCDA).

The AMMC was created in 2010 to operate municipal services within the territory. Created in 1976, the FCDA predates almost all other administrative entities in the territory. It is tasked with the planning, design and construction of the FCT’s infrastructure, and is governed by a board of directors and chaired by the Minister of the FCT. The passing of the Capital Territory Development Authority Act of 2009 established the FCT governance framework.

Population Growth

In a 2017 study undertaken by the Federal School of Surveying and the FCDA, Abuja’s population growth was estimated at 8.32% per annum, while satellite city populations were found to be rising even more quickly, at an estimated 20% each year. Rapid urbanisation can be attributed to a range of factors including better economic opportunities on offer in the territory, underinvestment in smaller towns and villages surrounding the FCT, and the relative safety of the area in a region affected by pockets of conflict.

Other estimates are more modest, but still indicate that Abuja’s population growth has outpaced the national average. According to the Canback Global Income Distribution Database (C-GIDD), Abuja’s population growth averaged 4.73% per annum between 2008 and 2018, to hit 2.75m in 2018, against 1.73m in 2008. According to the same source, national population growth averaged 3% over the same period. Meanwhile, the National Bureau of Statistics (NBS) reported the total FCT population to be around 4.35m in 2018 against a national population of approximately 198m.

Urbanisation Challenges

Rapid population growth has led to a rising proliferation of informal settlements, which have strained infrastructure systems. In September 2018 Victoria Imande, former acting director of the FCTA’s Satellite Town Development Department, reported that just 20% of the FCT’s population lives in Abuja city centre, while the remaining 80% reside in peripheral urban areas such as Jikoyi, Gwagwalada, Karu and Dutse Alhaji. The Abuja Master Plan of 1979, which laid out the long-term urban design of the city, was guided by the vision of equal access to the city’s public services and an organised distribution of residential and green spaces. However, urbanisation rates have far outstripped those envisioned by the planners, with the authorities struggling to cope with expanding informal settlements as a result of insufficient housing supply. Indeed, Abuja’s affordable housing shortfall was an estimated 600,000 units as of March 2017, with most real estate projects under development remaining unaffordable for significant sections of the population.

Economic Performance

Despite suffering some setbacks as a result of economic turbulence following the fall in international oil prices, the FCT has consistently outstripped the rest of the country in terms of economic growth. According to data from the C-GIDD, the GDP of the territory grew at an average rate of 11% between 2009 and 2014, while at the national level it grew at an average 6.7% during the same period. While growth fell dramatically following 2014 it has since recovered, rising to 3% in 2017 and predicted to grow by 4% over 2018. This performance exceeds that on the national level, where GDP grew by only 0.8% in 2017 and is expected to grow by 1.9% in 2018.

Meanwhile, household consumption has also outpaced that of the country as a whole, albeit at a more subdued rate in recent years. Consumption in the FCT grew 23.6% in 2013, before falling to 3.25% in 2014, while it fell from 21.3% to 1.92% on a national level, according to the C-GIDD. Following the impact of the fall in global oil prices, consumption in the territory has fluctuated, standing at 2.2% in 2015, before rising 28.8% in 2016 and falling again to 2.8% in 2017. This pattern only marginally exceeded that of Nigeria as a whole, where consumption rose by 1.36%, 28.2% and 2.6% over the same period.


In July 2018 the FCTA announced a proposed budget of N272bn ($879.4m) for 2018, a 22.5% increase over the appropriated budget of the preceding year. Under the proposal, capital expenditure is expected to reach N154bn ($497.8m), or 56.8% of the total, while recurrent expenditures would amount to N117bn ($378.3m), including N61bn ($197.2m) on overhead costs and N56bn ($181m) on personnel. According to the FCTA, 65.5% of the budget is set to be financed through internally generated tax revenue, while 25.8% is expected to come from the central government. In addition, 3.7% is set to come from value-added tax, 1.8% from excess oil revenue and the remaining 3.2% from bilateral lenders and international organisations.

The budget prioritises infrastructure and transportation. A total of N74.7bn ($241.5m) is set to be spent on infrastructure in Abuja, with 93.7% of this figure going to on going projects and 6.29% going to new works. In addition, N21.1bn ($68.2m) has been allocated to both new and old infrastructure in satellite settlements, and N8.9bn ($28.8m) to the compensation and resettlement of displaced persons. Transport, meanwhile, is expected to receive N20.6bn ($66.6m) in capital expenditure, of which N12.3bn ($39.8m) is to be used in the completion of the Abuja light railway project.

An additional N8bn ($25.9m) has been earmarked for the expansion and upgrade of major road links across the territory. The budget also allocates a total sum of N38bn ($122.9m) to education and N22.8bn ($73.7m) to health care. The remaining budget covers the provision and improvement of public utilities and additional public services.

If fully implemented the budget stands to make a considerable impact on the territory’s infrastructural basis. However, it should be noted that the revenue from internal taxation fell below the expected amount in the previous year’s budget. Of the N140bn ($452.6m) expected to be generated from tax in 2017, only N70.7bn ($228.6m) was received.

However, in an effort to overcome these issues, the FCT launched a new internal revenue service in October 2017. Furthermore, the 2018 budget allocates N1.23bn ($4m) to Abuja Geographic Information Systems (AGIS), a geospatial data storage and management agency covering the use and ownership of land throughout the whole territory. The improved operation of AGIS is expected to help better track asset ownership, and thereby enhance tax procedures and revenue generation.


To ensure the ongoing upgrade and expansion of the territory’s infrastructure, the FCTA has increasingly been focusing its attention on attracting new foreign direct investment (FDI). These efforts include tax incentives for companies with pioneer status and land access through the revived land swap initiative.

Foreign investment is also being attracted through the privatisation of state utilities and assets, both in FCT and the country as a whole. Investors also stand to benefit from Nigeria’s membership of the Multilateral Investment Guarantee Agency, which provides guarantees for non-commercial risks associated with specific investments.


Supported by these policies and incentives the FCT has risen to become an important destination for FDI inflows. While Lagos has traditionally accounted for the lion’s share of foreign capital investment, recent figures suggest that the FCT is catching up. According to the NBS, the FCT attracted the highest amount of foreign capital in the final quarter of 2017, with 49.8% of the total, outpacing Lagos for the first time. The territory retained this position in the first quarter of 2018, where it attracted 56.2% of capital investment, once more overshadowing Lagos.

In the World Bank’s “Subnational Doing Business Nigeria 2018” report the FCT was ranked first out of 37 sub-national regions of Nigeria in terms of ease of starting a business. Furthermore, the territory ranked fourth in terms of registering a property, up from seventh place in the previous ranking, which was published in 2014. However, the report does highlight room for improvement, with the FCT falling from 15th place to 27th place in the ranking in terms of the enforcement of contracts.

The Nigeria Investment Promotion Commission, the federal body responsible for the promotion and coordination of the country’s investment opportunities, has highlighted six priority sectors for investment; namely agri-business, light manufacturing, health care, tourism, energy and mining. In addition, current efforts to overcome the territory’s housing deficit and provide commercial areas for Abuja’s burgeoning population appear set to attract both domestic and international investment. “Based on recent projects the most attractive sector in the FCT is real estate,” Binta A Musa, a researcher at domestic construction firm AIC, told OBG. “These include the development of housing, markets, shopping malls, hotels and restaurants.”

Increased ICT Connectivity

The territory currently boasts one of the highest and fastest-rising electrification rates in the country. According to the most up-to-date figures from the NBS, the total number of customers in the FCT with a pre-paid metre stood at 1.62m in mid-2018, reflecting a 1.59% increase on the previous year.

In addition, the territory benefits from high mobile penetration rates and internet usage. There were 6.93m mobile voice subscriptions in the second quarter of 2018, reflecting a mobile penetration rate of 222%, based on an estimated population of 3.13m. This figures stands well above the current national average of 82.1%, according to the NBS.

Furthermore, the number of subscriptions is growing, up from 6.04m subscriptions in the second quarter of 2017, a 14.7% year-on-year (y-o-y) increase. Similarly, internet penetration in the territory is high and rising. According to the NBS, there were 4.73m internet connections in the FCT in 2018, a penetration rate of 151% based on the population estimates provided. Nevertheless, most of these are currently mobile internet connections, with only 60,400 being non-mobile phone connections, or 1.93% of the total (see ICT chapter).

This highlights considerable room for expansion in the supply and marketing of cable and DSL internet connections. Although Abuja has lagged behind Lagos in terms of human capital development in the ICT sector, its infrastructure offers a significant competitive advantage. “The city was built with telecommunication ducts embedded in the roads across the major metropolitan areas, which made it possible to deploy fibre-optic cables around the city in a more organised fashion than in places like Lagos,” Bruce Ayonote, managing director of domestic internet infrastructure firm Suburban West Africa, told OBG. “Although some satellite towns do not have the same quality infrastructure, Abuja is the only city in Nigeria where you can get fibre-optic internet access set up within a week, with very high broadband speeds.”

Furthermore, infrastructure and human capital development are also set to gain a boost from the ongoing development of a $1bn ICT park and conference centre in Abuja. First announced in 2007, the Abuja Technology Village is a planned science and technology free zone that would operate under the Nigerian Export Processing Zones Authority. In May 2017 developers announced the park would be open for operations in 2019, reporting that they had received over 100 expressions of interest from domestic and international companies interested in establishing a presence in the free zone.

Health & Education

The territory’s health care and education indicators, while mixed, are also generally elevated compared to the rest of the country. The Federal Ministry of Education reported that total primary school enrolment in the FCT rose from 266,204 in 2012 to 489,298 in 2016, a 184% increase. Meanwhile, literacy rates in the territory are among the highest in the country, with 90.1% of men age 15-24 years and 81.3% of women age 15-24 being literate as of 2016-17, according to UNICEF. These figures compare with a national average of 70.9% and 59.3%, respectively. The FCT has also achieved near total gender parity in school attendance, at both the primary and secondary school levels. Both public and private institutions are well represented at the post-secondary level, with the territory segment being home to 10 post-secondary institutions, including four accredited private universities.

The FCT’s health care sector is well developed by regional standards, and is well ahead of most other regions of the country in terms of both health care provision and outcomes. In 2018 the FCTA reported that there were over 236 primary health care facilities, 14 public hospitals, 600 private health care facilities and three tertiary facilities overseen by the Federal Ministry of Health. It is also a popular destination for domestic medical tourism. “Health care services in the FCT are ahead of most other states in Nigeria, with the exception of Lagos, where you have a lot of good quality hospitals because the population is larger,” Dr Iniobong Ekong, assistant director of health and human services at the FCTA, told OBG. “We also have significant levels of inbound medical tourism from Kogi, Nassarawa, Niger and Kaduna, and a lot of people also come from other parts of the country for health care treatment.”


Abuja’s transportation network is well developed and expanding, although rapid urbanisation has put pressure on the existing network. Built in accordance with the city master plan the metropolitan road network is extensive, although satellite towns remain underserved. The city connects to the north-east through the A234 Federal Highway, and to Niger State via a direct highway link which is still under construction. In addition, Abuja is intersected by the A2 Expressway, with connects it with Kaduna in the north and Lokoja in the south.

The FCTA’s proposed budget for 2018 earmarks N8bn ($25.9m) of capital expenditure for the expansion and extension of major road links in and around Abuja. This includes the expansion and extension of the Outer Southern Expressway and Inner Southern Expressway, along with the construction of the Southern Parkway and a new carriageway. With the allocation of these funds the authority expects to complete work on these roads by late 2018.

The territory has also experienced improvements in rail connectivity, becoming the first city in West Africa to inaugurate a rapid transit system, the Abuja light railway. The first stage of this project connects 12 stations across the metropolitan area and opened in July 2018. The new network connects the city centre with Idu, an industrial neighbourhood, and Nnamdi Azikiwe International Airport (NAIA), with five additional phases set to extend its coverage to 290 km. Furthermore, the city’s national rail system connects to the Lagos-Kano standard-gauge railway. The most recently completed section of the network is the Abuja-Kaduna rail line, which opened in December 2014. The $876m project was undertaken by the China Civil and Engineering Construction Company and spans 186 km.

The aviation segment is served by NAIA, which offers domestic and international flights. NAIA is the second-largest airport in the country in terms of passenger footfall. According to the NBS, a total of 3.56m passengers travelled through the airport in 2017, of which 77% were domestic and 23% were international. This figure represents a 16% decrease in overall passenger traffic on the previous year, this can largely be attributed to the six-week closure of NAIA during early 2017 to facilitate renovation of the airports runways. Following the reopening of the airport, NAIA recorded a 1.48% y-o-y increase in total passengers during the last six months of 2017. Furthermore, the airport recorded 2.14m passengers during the first half of 2018, a 47.9% y-o-y increase.

Following the 2017 renovation work, the airport has made considerable improvements to its domestic standing, being voted the international airport that had achieved the greatest improvements in the Nigeria Aviation Awards, held in March 2018. Operations at NAIA are set to improve further with the opening of a N61.2bn ($198m) new terminal, which is scheduled to reach completion in late-2018.


A wide range of new and ongoing projects in Abuja and its surrounding settlements are expected to provide a major boost to the territory’s construction sector. Although the industry is smaller than that of Lagos, with fewer companies and projects under way, FCT construction growth is set to accelerate in the coming years as the FCDA and private sector move forward with a host of new infrastructure and real estate projects.

Nevertheless, construction companies do face a series of challenges in the territory. The World Bank’s “Subnational Doing Business Nigeria 2018” report ranked the FCT 27th out of 37 locations in Nigeria in terms of dealing with construction permits. The report highlighted that investors must undertake 15 different procedures totalling an average 77 days to obtain a permit to build a warehouse. The total cost of the acquisition process was calculated at 8.4% of the warehouses value. Nevertheless, while the number of procedures falls slightly above the average in sub-Saharan Africa (14.8), the number of days taken and the value of the process falls below this average, at 147.5 and 9.9%, respectively. Furthermore, this marked a significant improvement on the ranking found in the previous World Bank report from 2014, when the territory ranked 35th out of 36 regions. In this previous report the number of procedures totalled 16 and the total process took an average of 83 days to complete.

Real Estate

While the majority of the territory’s infrastructure projects are being undertaken by the FCDA, private sector activities and investment predominate in the real estate sector. Construction has remained resilient on the back of rapid urbanisation and rising population growth in the territory, despite the broader economic downturn following the fall in international oil prices. “Abuja’s high-end real estate market seems to have weathered the slump better than the rest of the country, as there is a lot of demand,” Olayinka Braimoh, CEO of domestic player Hall 7 Real Estate. “Maitama and Wuse, for example, are areas with a lot of development.”

In its 2016 city report, real estate consultancy firm JLL stated that the FCT has increasingly endeavoured to encourage local and foreign investment in Abuja. Although the sector remains smaller than that of Lagos, with only a handful of players active in the market, JLL reported that companies including Churchgate Group, Novare, RMB Westport and Actis had all developed a pipeline of investment-grade assets in the FCT. These include the Jabi Lake Mall, which opened in November 2015, and the Novare Gateway Mall, which opened in December 2017. This also includes the ongoing construction of the N156bn ($504m) World Trade Centre Abuja project.

Centenary City

One of the largest real estate projects in the country is Centenary City, located in Abuja. The $180.6bn smart city project envisions the creation of an integrated urban centre combining a business district, financial centre, arts centres, residential areas, sports facilities, business and technology parks, and tourism services. The project is a PPP drawing the majority of its financing and development from the private sphere.

“The FCT is a strategic real estate development area,” Odenigwe Ike Michaels, managing director and CEO of Centenary City, told OBG. “With partners from abroad, major projects are increasing traction.” While the project has experienced a series of delays following its announcement in 2014, work is expected to continue in late-2018.

Indeed, according to a report published by estate intel, a domestic real estate market research firm, in September 2018 sales had already began for the project’s flagship residential area, The Grove, with developers currently selling 800-sq-metre plots for around $70,000. Upon completion, the city will form a free zone, offering investors offshore and chartered company status, as well as tax holidays. Over the lifetime of the project the authorities expect to create over 50,000 construction jobs and 5000 permanent well-paid jobs. In addition, the complex is expected to house 100,000 residents with the capacity to host 500,000 daily visitors.

Minerals & Agriculture

In addition to its importance as an administrative and commercial centre, the FCT also plays host to significant mineral deposits and a solid agricultural sector. According to the NBS, the territory accounted for the third-highest volume of mineral production in Nigeria in 2017, with an output of 4.46m tonnes, or 9.75% of total production. Of this total, the territory produced 3.52m tonnes of granite, 721,000 tonnes of granite dust, 204,000 tonnes of laterite, 16,700 tonnes of clay, 2970 tonnes of limestone, 250 tonnes of tin ore and smaller quantities of lead and zinc. The territory also possesses a sizeable agricultural base, which includes yams, millet, maize, sorghum and beans. However, in a study published by the development NGO ANE Osiobe International Foundation, researchers found that the FCT’s fast-growing population had placed pressure on both local and regional food supply networks. The report identified two crops – cassava and groundnut – as holding significant growth potential for the territory. In particular, increased cassava production could help local farmers tap into the nascent biofuel industry as the FCT seeks to expand energy production while also reducing carbon emissions.

“Renewable energy will help the country fulfil its commitments made at the COP21 UN Conference on Climate Change, while making a positive impact on the lives and livelihood of communities through the guarantee of stable power supply.” Sonni Ajayi, executive director of business development and international relations at Abuja-based biofuel firm Capegate Group, told OBG. “Biofuel projects will also help the government free up its budget for environmental waste management and health care.”


The territory’s robust infrastructure and significant mineral deposits provide a solid basis for expanded industrial investment. While the FCT is not yet home to a manufacturing-focused free zone, the State Partnership for Accountability, Responsiveness and Capability – a development initiative jointly backed by the UK and Nigerian governments – highlighted in 2017 that the FCT offers significant potential for future manufacturing expansion. According to the report, Abuja’s role as the administrative capital and financial centre has crowded out investment in the manufacturing sector.

However, in an effort to overcome this challenge in 2010 the FCT announced the creation of Abuja Industrial Park. The $1.8bn project, which is being developed by the Turkey-based Zeberced Group, covers over 135 hectares and is expected to provide a cluster for 117 industries. Upon completion the site is also expected to be independent in electricity generation, serviced with its own railway and water treatment plant, and equipped with banks, shopping centres, hotels and restaurants. Work on the project broke ground in 2013 and the first phase is expected to reach completion in 2018.


With high and resilient economic growth, an important role as the country’s administrative centre and significant mineral deposits, the future looks bright for the FCT. However, rapid urbanisation presents serious challenges. The ongoing prioritisation of transport and infrastructure spending, coupled with efforts to increase private sector investment in real estate go some way towards addressing these issues. However, more remains to be done to further increase private sector involvement in large-scale infrastructure projects and to leverage the territory’s manufacturing potential.

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The Report: Nigeria 2019

Abuja chapter from The Report: Nigeria 2019

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