Construction and Real Estate Sectors Contribute 11 Trillion Naira to the Economy

In the first quarter of 2024, the real estate and construction industries’ infrastructure-related contributions to Nigeria’s real GDP grew.

In contrast to the N9.1tn produced in the fourth quarter of 2023, the sector contributed a total of N11.2tn in the quarter, according to the most recent data made public by the Nigeria Bureau of Statistics.

According to the survey, the construction industry contributed 4.0% of GDP in the first quarter of 2024, and the real estate sector contributed 5.0%.

The report states that real estate services rose by 126.71 percent in nominal terms in the first quarter of 2024. This growth rate was greater than the growth rate reported for the same period in 2023 by 124.34 percentage points, and it was also higher than the previous Quarter.

“On a quarter-over-quarter basis, the sector growth rate was 58.59 percent,” the report said. 8.80% of the nominal GDP was contributed in the first quarter of 2024, compared to 4.46 percent in the first quarter of 2023 and 4.95 percent in the fourth quarter of 2023.

“The sector’s real GDP growth for the first quarter of 2024 was 0.84 percent, which was 0.86 percentage points less than the increase in the same period in 2023 and 0.50 percentage points less than that of Q4 2023.

The first quarter of 2024 had a quarter-over-quarter growth in the sector of -27.88%. In Q1 2024, it made up 5.20 percent of the real GDP, which is less than the 5.31 percent it did in the same quarter in 2023.

The Construction industry expanded by -0.29 percent in nominal terms (year-over-year) in the first quarter of 2024, according to the report, a 38.00 percent decline from the 37.71 percent growth rate observed in the same quarter of 2023.

“There was a decrease of 3.16 percentage points in relation to the rate that was recorded in the previous quarter,” it continued. Quarter-over-quarter nominal growth was 1.60 percent. In the first quarter of 2024, construction made up 10.24% of the nominal GDP, which is less than the 11.79% it made a year earlier but more than the 9.00% it made in the fourth quarter of 2023.

“The construction industry’s actual growth rate in the first quarter of 2024 was -2.14 percent (year over year), which is a 5.41 percent point decline from the rate observed in the prior year. There was a 5.84 percent point drop from the previous quarter. Quarter-on-quarter, the sector grew by -3.00 per cent in real terms.

“Its contribution to total real GDP was 4.01 percent in the first quarter of 2024; it was higher than 3.47 percent in the most recent quarter and lower than 4.22 percent in the same quarter of the previous year.”

The Nigerian Society of Engineers’ Victoria Island branch’s Technical Secretary, Babatunji Adegoke, stated in an exclusive interview with The PUNCH that the government was settling in and had begun to unveil policies that have made investors have confidence in the system; as a result, many are now investing more in the sector.

He added, “Furthermore, the government has shown determination to rebuild the economy through investing in the sector hence the rise in the GDP contribution. In addition, shelter is a basic need and as the population continues to grow so will the need for shelter and its associated infrastructures.”

In a similar vein, the Chief Executive Officer of Fame Oyster & Co., Olufemi Oyedele, said the Diaspora remittance contributed a lot.

He said, “Nigerians living abroad have faith in Nigeria’s real estate industry and are actively participating in it.” Additionally helpful have been the federal government’s Renewed Hope housing estate policy and the local, state, and federal governments’ road construction projects.