Preliminary figures from Nigeria’s ongoing GDP and Consumer Price Index (CPI) rebasing reveal that the real estate sector has surpassed oil and gas, now ranking as Nigeria’s third-largest industry. This marks a significant shift in the country’s economic structure, with real estate now positioned behind crop production and trade, which remain the first and second largest sectors, respectively.
Previously, agriculture, which made up more than 20 percent of Nigeria’s GDP, was considered the dominant sector. However, with the latest rebasing exercise, crop production is now classified separately and has become Nigeria’s second-largest sector. Agriculture as a whole contributed 28.65 percent to the GDP in Q3 2024.
Telecommunications, once categorized under information and communication, is now a standalone sector and has emerged as the fourth-largest contributor to the GDP. In Q3 2024, the information and communications sector contributed 16.35 percent, while trade accounted for 14.78 percent.
In the revised GDP structure, crude petroleum and natural gas, construction, and food, beverages, and tobacco rank fifth, sixth, and seventh, respectively. Notably, public administration has been entirely displaced from the top seven sectors.
Growth in Real Estate
In nominal terms, real estate services saw a remarkable growth rate of 46.52 percent in Q3 2024, an increase of 43.7 percentage points compared to the same period in 2023, though it showed a slight dip compared to the previous quarter. The sector’s contribution to real GDP was 5.43 percent, slightly lower than the 5.58 percent recorded in Q3 2023.
Despite challenges such as declining purchasing power, the demand for real estate in Nigeria continues to rise. Experts estimate a housing deficit of around 28 million units, with an annual need for 700,000 new homes to meet the demand.
According to Statista, the Nigerian real estate market is expected to reach a value of $2.61 trillion by 2025, indicating the sector’s substantial potential. Residential real estate dominates the market, with a projected volume of $2.25 trillion by 2025.
Global Real Estate Outlook
Globally, the real estate sector is expected to grow at a compound annual growth rate (CAGR) of 6.91 percent from 2025 to 2029, resulting in a market volume of $3.41 trillion by 2029. The United States is projected to lead the global real estate market, generating an estimated $136.6 trillion in 2025.
In Nigeria, demand for luxury apartments in key cities is on the rise, signaling an increased focus on high-end properties.
The Rebased GDP Structure
The ongoing rebasing of Nigeria’s GDP and CPI aims to better reflect the country’s updated economic conditions. This exercise, which is recommended every five years by the United Nations Statistical Commission, will allow for more accurate economic data and enhance policy-making. The base year for this rebasing is 2019, replacing the previous 2010 base year.
Moses Waniko, the technical assistant to the Statistician-General, highlighted that the rebasing exercise also covers newer sectors such as the digital economy, modular refineries, pension fund administration, national health insurance, and mining.
Waniko emphasized that the rebasing would provide insights into the distribution of economic contributions, guiding better planning and policy-making. He also pointed out that the rebased GDP would likely result in a larger overall economy, with improved metrics such as a higher per capita income and a more favorable debt-to-GDP ratio.
Economic Implications
The rebasing of the GDP and CPI is seen as a crucial step in ensuring that Nigeria’s economic indicators reflect current realities. Adeyemi Adeniran, Nigeria’s Statistician-General, noted that the rebasing would allow for more accurate development planning, helping policymakers address the nation’s evolving economic challenges.
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