Nigeria’s third-largest industry is now real estate, surpassing both oil and gas.
Recent data from Nigeria’s ongoing Gross Domestic Product (GDP) and Consumer Price Index (CPI) rebasing indicate that the real estate sector has overtaken oil and gas to become the country’s third-largest sector. This shift places real estate behind crop production and trade, which hold the first and second positions, respectively.
Previously, agriculture was Nigeria’s dominant sector, contributing over 20% to the GDP and encompassing subsectors like crop production, livestock, forestry, and fishing. In the current GDP rebasing, crop production has been separated from agriculture and now stands as Nigeria’s second-largest industry. Agriculture contributed 28.65% to the nation’s GDP in Q3 2024.
Telecommunications, formerly grouped under information and communication, has emerged as a standalone sector and is now the fourth largest. Information and communications contributed 16.35% to the GDP in Q3 2024. Trade accounted for 14.78% of GDP in the same quarter.
In nominal terms, real estate services grew by 46.52% in Q3 2024, significantly higher than the growth rate reported for the same period in 2023. On a quarter-on-quarter basis, the sector’s growth rate was 16.15%. It contributed 5.43% to real GDP in Q3 2024, slightly lower than the 5.58% recorded in the corresponding quarter of 2023.
Despite challenges such as declining purchasing power, there is a growing demand for Nigeria’s real estate. Several experts estimate the housing deficit at 28 million units, indicating a need for 700,000 new homes annually. According to Statista, the real estate market is anticipated to achieve a value of $2.61 trillion by 2025, with residential real estate holding the largest share. The market is expected to exhibit a compound annual growth rate (CAGR) of 6.91% from 2025 to 2029, resulting in a market volume of $3.41 trillion by 2029.
The National Bureau of Statistics (NBS) commenced rebasing the country’s GDP and CPI last year to reflect updated economic conditions, a process recommended every five years by the United Nations Statistical Commission. The last rebasing occurred in 2014, leading to a significant GDP increase of 89% and positioning Nigeria as Africa’s largest economy. The current rebasing exercise uses 2019 as the new base year and covers new areas of the economy, including the digital economy, activities of modular refineries, pension fund administration, the national health insurance scheme, and mining.
This rebasing is expected to enhance data accuracy and inform better policy-making in light of recent economic shifts, particularly in technology and digital sectors. It will also allow for economic and development planning, growth, and an increase in the size of the economy.