Construction, real estate contribute N11tn to economy

Infrastructural activities in the construction and real estate sector increased in its contribution to Nigeria’s real Gross Domestic Product in Q1 2024.

According to the latest data released by the Nigeria Bureau of Statistics recently, the sector contributed a total of N11.2tn in the quarter compared to the N9.1tn generated in the fourth quarter of 2023.

The report stated that the real estate sector contributed 5.20 per cent to the GDP in the Q1 of 2024, while the construction sector contributed 4.0 per cent of the GDP in Q1 of 2024.

According to the report, in nominal terms, real estate services in the first quarter of 2024 grew by 126.71 per cent, higher by 124.34 per cent points than the growth rate reported for the same period in 2023 and also higher compared to the preceding Quarter.

The report stated, “On a quarter-on-quarter, the sector growth rate was 58.59 per cent. The contribution to nominal GDP in Q1 2024 stood at 8.80 per cent, relative to 4.46 per cent recorded in the first quarter of 2023 and 4.95 per cent in the fourth quarter of 2023.

“Real GDP growth recorded in the sector for the first quarter of 2024 stood at 0.84 per cent, lower than the growth recorded in the first quarter of 2023 by 0.86 per cent points, and lower by 0.50 per cent points relative to Q4 2023.

“On a quarter-on-quarter, the sector grew by -27.88 per cent in the first quarter of 2024. It contributed 5.20 per cent to real GDP in Q1 2024, lower than the 5.31 per cent it recorded in the corresponding quarter of 2023.”

While the report noted that the Construction sector grew by -0.29 per cent in nominal terms (year-on-year) in the 2024 first quarter, a decrease of 38.00 per cent points compared to the rate of 37.71 per cent recorded in the same quarter of 2023.

It added, “There was a decrease of 3.16 per cent points when compared to the rate recorded in the preceding quarter. Nominal growth quarter-on-quarter was recorded at 1.60 per cent. Construction contributed 10.24 per cent to nominal GDP in the first quarter of 2024, lower than the 11.79 per cent it contributed a year earlier and higher than the 9.00 per cent contributed to the fourth quarter of 2023.

“The real growth rate of the construction sector in the first quarter of 2024 was recorded at -2.14 per cent (year-on-year), lower by 5.41 per cent points from the rate recorded in the previous year. Relative to the preceding quarter, there was a decrease of 5.84 per cent points. Quarter-on-quarter, the sector grew by -3.00 per cent in real terms.

“Its contribution to total real GDP was 4.01 per cent in the first quarter of 2024; lower than its contribution of 4.22 per cent in the same quarter of the previous year, and higher than in the immediate past quarter where it contributed 3.47 per cent.”

In an exclusive interview with The According, the Technical Secretary of the Nigerian Society of Engineers, Victoria Island branch, Babatunji Adegoke, said the government was settling in and had started to unveil policies that have made investors have confidence in the system hence 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, “The Nigerians in Diaspora believe in Nigeria’s real estate sector and are playing a big role in the real estate market in Nigeria. The Federal government policy of Renewed Hope housing estates and the construction of roads by the governments, local, state and federal, have also contributed.”