By YINKA KOLAWOLE, with agency report

Nigeria attracted $3.96 billion (about N780.12 billion) on real estate development in 2014, which is 11 percent of the total sum of $36.4 billion expended on infrastructure construction projects in the country.

Data recently released by Deloitte African Construction Trends report placed Nigeria at the top of West African countries in major infrastructure construction projects in 2014, with the country spending $36.4 billion on major infrastructure construction projects for the year 2014. The total expenditure includes both foreign and local as well as public and private sector investment.

Investment has been on the rise following the re-basing of the country’s gross domestic product (GDP) to $509.9 billion in April 2014. According to the report, the projects range from Water which took 39 percent, Energy and Power (17 percent), Oil and gas (17 per- cent), Transport (15 percent), Real Estate (11 percent) and Manufacturing (1 percent).

“Whereas South Africa was previously the choice market in Africa for scalable operations, Nigeria now has a more attractive profile, offering scale and strong growth,” Deloitte said in the report. Yet the country faces some lofty hurdles if it is to realise its required infrastructure developments.”

The report noted that West Africa exhibited a strong level of growth with the total value of projects under construction increasing from $50 billion to $75 billion year-on-year, although there was no change in the number of projects qualifying for the report this year. Although the region still accounts for just half of the level of investment in Southern Africa, it is starting to close the gap, consistent with Nigeria’s new title as the biggest economy in Africa.

Deloitte further noted that South Africa has significantly more value in projects under construction or development than Nigeria does, showing that while a market may have scale and growth, it also needs a stable business environment, which Nigeria struggles with.

According to the report, reforms and development plans implemented by the Nigerian government are beginning to take effect, with the privatisation of the state-run Power Holding Company of Nigeria virtually complete and an increasing number of Public Private Partnerships (PPPs) entering the market.

There is also significant activity underway in Lagos (the commercial capital), which accounts for more than 60 percent of non-oil GDP. “Some of the more noteworthy moves in the country have been the breaking ground on a second Niger Bridge. It could boost the Nigerian construction industry, improving East-West trade and helping to progress the nascent PPP model,” the report said. The transport sector where Chinese companies dominate could also emerge as one of the strongest sources of growth for the Nigerian construction industry over the medium term, according to Deloitte.

Two projects that demonstrate such dominance are the $1.49 billion Lagos to Ibadan railway contract, which has been awarded to China Civil Engineering Construction Corporation (CCECC), and the Olokola Deepwater port project, awarded to the China Ocean Shipping Group. Other noteworthy projects are the Bonga NW Project, Eko Atlantic City, Lagos Light Rail, Abuja Light Rail in the Federal Capital Territory and Abuja Centenary City.