Nigeria Infrastructure Report Q2 2016
BMI View: We have marginally downgraded our short-term outlook for the Nigerian construction sector ascontinued uncertainty over the direction of the naira, monetary policy and oil prices sees private sectorprojects remain on hold. Infrastructure on the other hand will largely continue to see buoyant growth on theback of a expansionary 2016 federal budget, although power sector projects will be subject to similarheadwinds as we are seeing in the residential and non-residential building sector.
Latest Updates And Structural Trends
We marginally lowered our overall construction industry outlook for 2016 and 2017 forecasts to 7% and10% y-o-y real growth respectively, largely due to the residential and non-residential sectorunderperforming. Over the long-term, Nigeria retains strong infrastructure fundamentals and over our 10-year forecast period we forecast average annual real growth of 10.2%.
We expect the transport sector to outperform, given heavy Chinese involvement in financing and buildingmajor projects as well as a large focus on capital investment in the 2016 federal budget - increasing over200% y-o-y.
The residential and non-residential building sector has been hardest hit by the economic turmoil and in2016 we forecast real growth of just 6.5% y-o-y - a notable slowdown after years of double-digit growth.
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