BMI View : Despite the peaceful passing of the Nigerian election, we remain cautious in our forecasts for real growth in the Nigerian construction sector over 2015 and 2016. Our forecast s stand at 11% and 9.8 0 % for 2015 and 2016 respectively, with growth averaging 10.6% over our 10-year forecast period to 2024 . President-elect Buhari faces severe macroeconomic headwinds , which will weigh on growth, but his rhetoric on reform to PPPs and tackling corruption bodes well for the long-term attractiveness of the infrastructure sector to investors.
The best case election scenario has played out, in that there looks set to be a peaceful transition of power from incumbent President Goodluck Jonathan and the victor in March's election president-elect Muhammadu Buharo. While this may give a slight boost to the economy, given previous downside risk not materialising, we remain downbeat on 2015 and 2016 in terms of growth in the construction sector.
A fall in oil prices will be the major drag on growth. The naira has depreciated, interest rates have been hiked and importantly government revenues will be lower than expected. Combined, public and private investment in the sector will be lower over 2015 and 2016.
Over the long-term however, we expect Buhari to attempt to deal with the corruption which plague's Nigeria's infrastructure, power and oil and gas sectors, as well as continue the reforms and development plans implemented under President Goodluck Jonathan. Furthermore, we expect the major projects will continue to be supported by Chinese financiers and companies.
The potential of Nigeria's infrastructure market has long been known, however a chronic lack of investment and the laborious business environment has limited its growth prospects. We highlight persistent risks hampering the implementation of major projects, ranging from deep-rooted corruption and violence perpetrated by militants to inefficient bureaucracy.
Key Trends And Developments
The Nigeria Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Nigeria Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Nigerian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Nigeria to test other views - a key input for successful budgetary and planning in the Nigerian infrastructure market.
- Target business opportunities and risks in the Nigerian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Nigeria.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.