Five oppurtunity areas Nigeria’s Construction

Five opportunity areas in Nigeria’s growing construction industry


According to Nigeria’s National Bureau of Statistics, the construction industry since 2010 has enjoyed a real growth rate of 13%. Government infrastructure spending has been a major driver of this growth as well as private sector investment in both residential and non-residential construction activities.

How can local and foreign investors take advantage of this growth?  Here are five opportunity areas for investment, based on insights from experts, businesses and stakeholders involved in the construction industry.

  1. Residential Housing
    According to Nigeria’s Bureau of Statistics, the contribution of real estate sector to the GDP has grown on an average of 17.5% between 2010 and 2013. But with a population of over 167 million people and a rising middle class, the demand for quality housing remains high. According to the Federal Mortgage Bank of Nigeria (FMBN), the country currently has a housing deficit of 17 million units.

Real estate projects are springing up in Abuja and Lagos.  Those housing projects however make up only one percent of what Nigeria needs, says Vincent Nwani, director of research and advocacy for the Lagos Chamber of Commerce and Industry.

“For us at the chamber we feel that Nigeria is not doing so great in terms of explosion or revolution in the construction/real estate environment”, Nwani said. “We need investments in low cost housing to meet the demand from the teeming Nigerian households. The shortage of residential and commercial buildings means opportunity in the construction industry is very huge. We have not yet scratched the surface”.

  1. Infrastructure
    Although government infrastructure spend has been a major driver of growth in Nigeria’s construction industry, analysts say the country remains heavily underserved with infrastructure. They agree a lot of construction is still required in both public and private infrastructure.

In February 2014, President Goodluck Jonathan announced the implementation of Nigeria’s National Integrated Infrastructure Master Plan will cost USD 2.9 trillion over the next 30 years.

Okey Ezenwa, a member of civil engineering consulting firm Yola Consultants, says investors can set up an equipment assembly plant and explore opportunities in road construction. “Road construction requires a lot of equipment”, he said. “An equipment company in Nigeria can produce or assemble road construction equipment such as cranes, bulldozers and welding machines”.

In addition, as corporate offices and hotels spring up in major cities such as Lagos, Ezenwa says standard reinforcements are needed, particularly, for high-rise buildings.
“Most of the standard ones, like those used by Julius Berger, are imported”, the civil engineer noted. “If a good operator will come in and put up a manufacturing unit that produces standard iron rods it will be good for the market and investor”.

  1. Retail
    The retail sector continues to stimulate growth in Nigeria’s construction industry. Data from the statistics office reveal that the services sector, which include retail services, made the largest contribution of 51% to Nigeria’s latest rebased GDP.

According to McKinsey’s recent growth estimates for the economy, annual sales in consumer goods could more than triple to $1.4 trillion by 2030 from the current $388 billion. That likely explains the expansion projects by multi-national companies such as  Unilever Plc, Nestle Plc and Shoprite Holdings. The South Africa headquartered grocery store Shoprite, for instance, has  announced plans to build dozens of new retail outlets across Nigeria.

Ado Bayero Mall opened in the northern city of Kano a few months ago. In the South, Effurrun Mall in Delta State and Onitsha Mall in Anambra will open to the public later this year.

PayPal recently launched in Nigeria. In its first week of operation, consumers were reported to have purchased items from Britain, China and the United States via its online platform. As e-commerce thrives in Africa’s biggest economy, global companies will need to set up stores closer to their customers base to facilitate improved service delivery.

  1. Lekki Free Zone
    The Lekki Free Trade Zone LFZ was launched in 2004 to harness the investment and tourism potential of Lagos. The emphasis is on manufacturing, real estate and tourism, said Chi Changgui, commercial controller of the Lekki Free Zone Development Company. It’s a mixed-use development.

The LFZ, according Changgui, has received diversified investment interest from Africa, China and Europe. Apart from well-known projects such as the USD 9bn refinery Dangote Group, Changgui said that a Nigerian garment factory and a food processing company from Ukraine, are slated for the trade area. He adds that some companies have started preliminary site work.

The Lekki Free Zone is part of the Lagos State Lekki Master Plan project, which includes the satellite estates and towns around Lekki, offering multiple investment opportunities.

“We have the free trade zone, the upcoming airport there and to the west side of it, the Grace Field Phoenix Estate, Orange Island and the Shell Estate, all coming up”, says Kunle Ladega, an urban and regional planner in Lagos. “There is also plan for a light rail project around that axis”.

  1. Eko Atlantic City
    Eko Atlantic City, another city being built from scratch in Lagos, aims to actualize the megacity dream of the Nigerian commercial capital.

“We wanted to tap into the experience of worldwide projects such as Cape Town and Dubai”, says David Frame, managing director for South Energyx, promoters of the Eko Atlantic City Project.

Eko Atlantic City allows anyone who wants to go into construction or the real estate business to think outside the box, Ladega notes. “The City provides opportunity for investors to test their dexterity in real estate”, he said.

Modeled after 5th Avenue in New York City, Frame says the city is being designed to hold 250,000 permanent residents and 150,000 visitors. The main district should be ready two years from now and open for visitors, he says, adding there are clients already developing buildings. Still, contractors and work-specific builders are needed to make the city a reality.

Nigeria’s First Bank plans to build a 52-story building at the site. The land was bought two years ago and Frame anticipates building will commence this year.

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Construction News Zambia

ABCEC hails construction internships in Zambia

The association of building and civil engineering contractors in Zambia (ABCEC) has hailed construction internship schemes saying they will go a long way to promote skilled manpower in the country.

Zambian president Edgar Lungu recently launched the 2015 national youth policy and action plan for youth empowerment, which seeks to create an estimated 500,000 jobs by the end of 2016.

According to ABCEC, this development is a land mark achievement by the country which needs support from all well-meaning Zambians.
ABCEC notes that the government needed to be commended for developing the 2015 youth policy.

From a perspective of contractors, the construction industry stands to benefit from the launched youth policy through apprenticeship and internship scheme, as there is a shortage of skilled manpower, observes ABCEC.

The ABCEC opines that the government should consider moving a few more steps by incentivizing the arrangements to make it attractive for employers to take on interns and apprentices.

The President stated that it was imperative that young people who make up the majority of Zambia’s population play a key role in the development of the country especially in the construction industry as there can be no meaningful development without the involvement of the youth.

ABCEC is an umbrella body for building and  civil engineers in Zambia.

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Railway Project In Kenia


Kenya is from this July set to start off its second phase of the massive Standard Gauge Railway project where a line will be constructed from Nairobi to Lake Victoria port, Kisumu. The development is meant to enhance transportation of goods between Kenya and Uganda. The new route is now being favored from the previously planned Nairobi-Malaba route since it provides shortest route to East African countries.

“Construction of phase two of the standard gauge railway line will begin in the 2015-2016 financial year under a design and build framework,” said the National Treasury in February this year.

In Kenya, the US$ 4bn Standard Gauge Railway project involves construction of a 398km line that will link Nairobi to the shores of Lake Victoria in Kisumu and further to Uganda. The line will also be hooked to Rwanda, Sudan  and Burundi according to East Africa’s master plan for a Standard Gauge railway line. It is expected to aid in the decongestion of goods from the Mombasa port.

Construction has finally begun in Kenya for the Mombasa-Nairobi route, a project being undertaken by China Communication Company. The link from Mombasa to Nairobi is 609km. Uganda has also entered deal with the China Harbour Engineering Company Limited (CHEC) this month to see construction of US$ 3.2bn railway line between Kampala through Malaba to Nimule in South Sudan. 

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Africa Must Look For Partnership

Africa must look for partnerships


Africa needs to form partnerships with the developed nations in order to realise the continent’s goal to industrialise, International Relations and Cooperation Minister Maite Nkoana-Mashabane said .

She was speaking in Washington ahead of the US-Africa Leaders’ Summit called by US President Barack Obama.

Nkoana-Mashabane said while South Africa would listen to what President Obama had to say it was important that an Africa’s voice be heard during deliberations this coming on Wednesday (6 August).

“Wherever we go, we, together with other African governments, will always champion the African agenda, particularly regarding peace, security and development, including industrialisation and beneficiation of our extensive mineral resources,” she said.

The conference takes place after President Obama announced the Washington Nelson Mandela Leadership Initiative to develop and train political and economic leaders in Africa.

The programme will be rolled out in Ghana, Kenya, South Africa and Senegal and its beneficiaries will be Africans aged between 25 and 35, who will be given an opportunity to study at some of the USA’s top universities.

“We welcome this initiative. It’s one of many programmes that we as the South African government support and hope other African nations will support these and other initiatives to industrialise and grow Africa’s individual economies,” Nkoana-Mashabane said.

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Kenya Calling

Kenya calling

Driving to the Jomo Kenyatta International Airport in Nairobi, my Kenyan driver gestures out his right-side window and says: “That’s the stadium where Obama will be speaking tomorrow”.

Indeed, 60,000 Kenyans swarmed into the Kasarani Stadium on 25 July to hear US president Barack Obama address his father’s homeland. His two-day visit was front page news every day for more than a week prior, while American flags and posters of the president were adorned across the country — from rural villages to the chaotic streets and slums of Nairobi.

Such was the hype over the first visit of the black American president, your correspondent had to head to the airport five hours early, thanks to an ill-timed flight out that coincided with Obama flying in and the consequential roadblocks.

But Kenyans appeared only excited by the presence of their most famous kin. During the stadium speech, Obama praised Kenya for having “come so far in just my lifetime”, highlighting the fact Kenyans no longer needed to leave their native country to seek higher education, while it hosted for the first time the Global Entrepreneurship Summit, coinciding with his visit.


Kenya has the fourth-largest economy on the continent, elevated following a recalculation two years ago to take into account sectors such as communications and property, which saw its gross domestic product (GDP) increase by 25 percent.

The World Bank now considers Kenya as a middle-income country, rather than a low-income one, and the improved economic position has seen the country enjoy flourishing attention from investors, including from the Gulf.

“Increasingly, you see that companies now when they make a decision where they want to position their [African] headquarters it’s either South Africa, Nigeria or Kenya, period,” Cabinet Secretary for the Ministry of East African Affairs, Commerce and Tourism, Phyllis Jepkosgei Kandie, tells Arabian Business. “[The recalculation of the economy] gives us a huge advantage, both in terms of potential investors and our standing in Africa.”


Kenya’s GDP grew by an estimated 5.3 percent to $60.94bn in 2014, according to the African Development Bank. That compares to the continent’s largest economy, Nigeria, with a GDP of $568.5bn. Angola (which has a GDP of $131.4bn) is Africa’s third-largest economy.

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Lebanon’s growth of construction

High growth in Lebanon’s construction and infrastructure

The private sector in Lebanon has been driving the country’s economic growth for the last four years. The construction sector is growing, with prestigious projects to build 5-star hotels and luxury properties in central Beirut.

The new projects hold opportunities for Danish architects, contracting companies and manufacturers of Danish design and luxury goods.

”The economic upturn is attributable to the fact that the Lebanese financial sector suffered no adverse effects from the financial crisis. Quite the contrary: Lebanon benefited from the multinational banks’ and investment companies’ failed investments, and billions of dollars sought refuge in Lebanon during the crisis. This has generated a lot of interest among investors worldwide, who have seen the potential in the free and dynamic market in Lebanon,” says Jan Top Chistensen, Danish Ambassador to Lebanon.

The country’s infrastructure holds a great many challenges, and the Lebanese government has pledged to carry out a number of projects. The power plants are to up their electricity generation and renewable energies – solar, wind and hydro – are on the cards. The country’s resources of potable water must be better exploited and there is a commitment to sorting and treating waste. Most recently, large oil and gas deposits have been discovered in the sea off the Lebanese south coast.

Skilled workforce
”A number of Danish companies have enjoyed a solid position on the Lebanese market for many years, while other Danish companies are relative newcomers,” says Jan Top Christensen, adding that:

”Lebanon is a very open country with a skilled workforce, which besides Arabic are also fluent in both English and French. Doing business in and with Lebanon is very easy, and starting a company in the country is relatively low-cost.”


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Ethiopia’s dam construction

Ethiopia Continues Dam Construction

DDIS ABABA—Ethiopia and Egypt have been in a diplomatic dispute for weeks over the construction of what will be Africa’s largest hydro-electric dam – impacting the waters of the Nile River. But with Egypt facing political turmoil at home, attention has also been diverted from this controversial project.

The massive construction of the Great Ethiopian Renaissance Dam continues despite sometimes angry protests from Egypt.

At issue is – diverting part of the Blue Nile since May.

The recently ousted Egyptian government feared the diversion would impact the Nile River flow – on which it is heavily dependent.

All of this will be a reservoir with 74 billion cubic meters of Nile waters.  Ethiopia said it will gradually fill the reservoir in the coming years, leaving Egypt questioning how the reservoir can be filled without affecting the water flow, especially during periods of drought.

Simegnew Bekele, one of the dam’s project managers, said better water management by both Egypt and Ethiopia will be the key. “The water will flow through these culverts permanently. That culverts will be part of the dam, which will be embedded, which will have gates and during any low flow the water will pass through the culverts because it will be installed at the normal riverbed level. We cannot change the normal riverbed level,” he explained.

Ethiopia is proceeding with construction even as environmental experts and diplomats continue to work out Nile River resource management among affected countries.

The Great Ethiopian Renaissance Dam will make Ethiopia Africa’s biggest power exporter in the next four years – producing 6000 megawatts of hydroelectric power. The dam will be 1708 meters long, 145 meters high and will be equipped with two powerhouses.  Potential buyers of the electricity include Somalia, Uganda and even possibly Egypt.

The dam will be competed in 2017 at a cost of close to $5 billion.

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