Why get involved with Nigeria's construction industry?
Published on 06/05/2015
Nigeria's construction industry is in an excellent position at the moment. The forecast for the sector is continued growth for at least the next five years, and in 2020 it is predicted to become the fastest-growing building industry in the world. As such, it is an excellent market to get involved with.
Companies involved in the build and interiors industry that are looking for a new market should certainly consider Nigeria. There are many opportunities available at the moment, and the industry is set to grow even more over time, so getting involved before it becomes too crowded is a good idea.
Here are some of the reasons you should think about joining the booming Nigerian build and interiors industry:
Growing population and economy
Nigeria doesn't often spring straight to mind when talking about the world's most populous countries, but the nation has the seventh largest population in the world. In 2013, 173 million people were recorded as living there. Around 21 million of them are located in Lagos, the country's largest city.
This population has more than doubled in just over 20 years, with 82 million citizens recorded in 1991. The rapid increase of Nigeria's populace has caused the economy to grow with it at a similarly impressive rate. It is currently the largest economy in Africa, with a GDP of $521.8 billion.
Nigeria’s National Bureau of Statistics has predicted that this economic growth will continue in the coming years, increasing by between 5.5 and 6.0 per cent from 2015 to 2017. Many analysts see Nigeria's growth continuing even further into the future, and by 2050 it is expected to become one of the top 20 economies on Earth.
Increased demand for housing
This combination of a growing populace and a strengthening economy means there is a great need for housing. Currently, Nigeria builds around 100,000 homes annually, but in order to keep up with demand - particularly from its middle class of more than 23 million people - it will need to construct 700,000 each year.
In total, the country's National Bureau of Statistics estimates that it needs an additional 17 million housing units, although the UN thinks this figure is more like 20 million. At least five million new homes are needed in Lagos alone.
In order to tackle this housing shortage, the Nigerian government has launched what it calls the National Housing Policy, along with a National Urban Development Policy. Together, these schemes will lead to $289.8 billion being spent on providing around one million new housing units each year.
A booming construction industry
Unsurprisingly, this means the construction industry in Nigeria is booming. It is the country's second-largest employer, with around five per cent of the populace working in the sector, and over the last five years it has averaged an annual growth rate of 9.5 per cent.
One of the benefits of this industry growing so rapidly is the level of profit firms are able to make on construction projects. In Nigeria, the average profit margin on building projects is between 25 and 30 per cent, while in more mature markets this rarely averages at higher than 20 per cent.
All these advantages of the Nigerian construction industry make it a great new market for related businesses. Now is a fantastic time to get involved with this growing market while it is still maturing.