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building and construction industry in Nigeria

An Overview of the Building and Construction Sector in Nigeria

The Building and Construction sector is very crucial in any nation’s social and economic development. There are many factors responsible for this. This article gives an overview of the building and construction sector in Nigeria.

Apart from the Building and Construction sector’s potential with respect to employment generation, the various activities undertaken in the sector are very germane to fostering effective sectorial linkages and enhancing, as well as sustaining economic development.

For instance, efforts at ensuring sound and sustainable national and economic development cannot ignore the importance of infrastructural development (transportation-road, rail, air, sea modes), industrial development (construction of industrial parks and factories), construction of institutional buildings, and provision of accommodation with respect to construction of various types of buildings, among others. These are areas where the building and construction sector is indispensable.

The Building and Construction sector has been relevant in the development of the Nigerian economy. Housing is a major component of the building and construction sector.

As noted by Kissick et al (2006), “housing is a key input in economic, social, and civic development. Many housing-related activities contribute directly to achieving broader socio-economic development goals; it is a major driver of economic growth; worldwide and especially in low-income countries, housing construction creates job opportunities”.

Housing matters to economic development as it enhances economic performance. Similarly, in Nigeria, the construction sector has provided employment for different categories of employees, especially in major Nigerian cities where construction activities have been immense.

These include the Federal Capital Territory (FCT), Abuja, the various State capital cities like Lagos, Port-Harcourt, Ibadan, Kaduna, Kano, among others. The sector is also pivotal in sectoral linkage as its activities have multiplier effects on the growth of other sectors, especially the building materials industry, real estate transactions, among others.

Efforts at transforming the power, transport, housing and industrial sectors are not likely to bear the desired fruits without the active participation of the actors in the building and construction sector as well as the effective and efficient performance of the sector.

There are challenges associated with the performance of the building and construction sector. These have always adversely affected the sector’s contribution to economic development.

In view of the importance of the sector and the role it is expected to play towards achieving the country’s vision, there is need to address those challenges and put the sector in a good stead for effective and efficient performance in the years ahead.

Housing is a major component of the building and construction sector. In this regard the relationship between the housing sector and the economy is used to illustrate the importance of the building and construction sector to the economy.

There are various conceptualisations about the relationship between the housing sector and economy. The linkage is highlighted below;

  • Housing as a residence and a basis for place shaping
  • Housing and labour markets
  • Housing within areas of ‘growth’ and regeneration
  • Housing and the construction and design sectors
  • Housing as a service provider within local economies
  • Housing as a medium for capital investment.


Housing as a Residence and Basis for Place Shaping

It is opined that decent homes in safe and cohesive communities that themselves have recognised ‘function’ and identity (not shanties, squatter settlements and slums) can inspire confidence in an area as well as provide a secure base that offers real opportunity enabling people to lead fulfilling lives. Such a community is likely to deliver economically active residents.

Housing and Labour Markets

This has to do with the need for certain skills to be available in steady and reliable supply to meet the needs of local businesses. Where housing is not affordable, there is problem getting low paid workers which can restrict economic growth.

Low paid workers live elsewhere and they have to be transported at high cost which may increase cost of doing business.

Housing within Areas of ‘Growth’ and Regeneration

In areas designated for growth and regeneration, increased supply of housing is pivotal in leading development, to support the economic growth taking place and to ensure greater sustainability of development of the overall area.

Housing and the Construction and Design Sector

The construction industry has contributed significantly to national and local economies. Housing development and refurbishment programmes provide a major contribution to economic activity, creating a range of employment opportunities. For example construction workers, project and site managers, designers, architects, surveyors, engineers, etc

Housing as a Service Provider within Local Economies

As a business, the housing sector contributes to local, sub-regional and regional economies. There are several services and activities associated with housing. There are real and estate business, housing and neighbourhood management services, parks and gardening services, among others. Many people are engaged in these services to earn a living.

Housing as a Medium for Capital Investment

Housing provides an attractive form of capital investment. Such investments drive the development of particular forms of housing that seems to be attractive and successful in increasing quickly in value which at times could lead to ‘buy and leave empty’ phenomenon as is experienced in Abuja, where the increase in capital value alone makes the investment worthwhile.

For every $1 million of construction output, tens of thousands of dollars are spent on primary materials, transport, and property services

Pepple, the former Nigerian Minister of Lands, Housing and Urban Development, also notes that housing is universally acceptable as the second most important human need, after food and that under the Nigeria’s Transformation Agenda and Vision 2020, the provision of accessible and affordable housing is one of the strategic national imperatives for guaranteeing the well-being and productivity of the citizenry.

The Former Minister also acknowledged the job creation potential of the housing sector. According to her, the construction of housing unit requires the services of Architects, Engineers, Draughtsmen, Bricklayers, Tillers, Carpenters, Moulders, Plumbers, Electricians, Iron Benders, Painters and various vendors.

She also opines that the funding of sustainable housing delivery promotes investments in the production of building materials and boosts linkage businesses, all of which generate employment in the economy

Nigeria has always made efforts at improving its economic status but there should be more emphasis on the building and construction sector.

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