The contributions of the real estate and construction sector to Nigeria’s real Gross Domestic Product increased by N8.9trn in the fourth quarter of 2022, according to the latest GDP report released by the National Bureau of Statistics.
The sector’s GDP contribution rose to N28.9tn despite high-interest rates, inflation, cost of building materials, amongst other challenges faced last year.
The report showed that construction services raked in N5.7trn while real estate contributed N3.1tn to the GDP in the fourth quarter.
The NBS recently announced a decline in the country’s GDP growth to 3.10 per cent in 2022 from 3.40 per cent in the previous year.
The NBS calculates the sector’s contribution by adding up gross outputs such as a sum of fees, the value of work done, commissions receivable for the services rendered and other incomes.
It also considers intermediate consumptions such as details of the cost structure including transportation fees, operational expenditure, minor repairs and maintenance, etc.
Further analysis revealed that the annual growth rate of the real estate sector was 10.75 per cent in 2022 with a total contribution of 5.64 per cent, higher than the 5.60 per cent reported in 2021.
Also, incomes from its services in the fourth quarter of 2022 grew by 10.61 per cent, higher by 7.13 per cent points than the growth rate reported for the same period in the prior year.
The report read, “In nominal terms, Real Estate Services in the fourth quarter of 2022 grew by 10.61 per cent, higher by 7.13 per cent than the growth rate reported for the same period in 2021 and higher by 1.48 per cent compared to the preceding quarter. On a quarter-on-quarter, the sector growth rate was 22.95 per cent.
“The annual growth rate of the sector was 10.75 per cent in 2022. The total contribution of the sector in real terms in 2022 stood at 5.64 per cent, higher than the 5.60 reported in 2021. Overall, a growth of 3.95 per cent was recorded in 2022.
According to the GDP data, contributions from construction services also grew by 4.54 per cent during the period under review, while nominal growth quarter-on-quarter was recorded at 16.10 per cent.
The NBS stated, “Construction contributed 10.16 per cent to nominal GDP in the fourth quarter of 2022, higher than the 9.99 per cent it contributed a year earlier and higher than the 9.50 per cent contributed to the third quarter of 2022.
“The total contribution of the sector in nominal terms in 2022 stood at 9.38 per cent. Overall, the sector grew by 4.54 per cent in real terms in 2022.”
Reacting, the Chairman of the Real Estate Developer Association of Nigeria, Aliyu Wamakko, stated that the contributed amount had revealed what the private sector could achieve if given the necessary support.
He said, “When you talk about real estate, it is driven by private investors. This means for any economy to strive the private sector must be given a platform and a level playing ground for them to perform.
“For example, creating jobs in real estate does not require an incubation period. Anytime you start building a house, at least 25 persons will get a job. So, if the government wants to support the economy of the country, more opportunities should be given to the private sector.”