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.
YABATECH Floats Mortgage Bank
YABA College of Technology (YABATECH) in Lagos said it would float a mortgage bank, to train the students on industrialisation.
Head, Public Relations Unit, YABATECH, Mr Charles Oni told newsmen in Lagos that the capital deposit had been paid to the Central Bank of Nigeria (CBN). He said that the bank would provide an all- encompassing training and would also be used for the collection of tuitions fees.
The process is ongoing now; once we get the CBN’s nod, we will float it. So many members of staff are investors; shares were sold to staff, so that they can be part of the venture. We publicised the availability of shares over time and as at today, the capital outlay has been perfected. And all that is being awaited now is the CBN’s nod, to ensure that the bank operates as required,” Oni said.
He said the college had put in place a Banking and Finance Department, to handle the bank and to also train the students. Oni said that the college was introducing the bank to provide comprehensive knowledge for students on how to go into industrialisation, production, marketing and banking.
“Presently, students pay all their fees online; the Bursary Staff do not handle cash any more. Everything is done online; so, the bank will help in the collection of fees. The bank will be situated within the college, and a site has been located for the project. Technically, YABATECH is ready for the take- off of the bank,” he said.
Oni said the bank would be able to sustain itself and would also serve as an additional revenue earner for the institution. “The original concept is that it will be used as a training platform for students in the Banking and Finance Department,” he added.
•Culled from Vanguard