According to preliminary data from the ongoing rebasing of the GDP and CPI, real estate is now Nigeria’s third-largest industry, overtaking oil and gas.
Real estate supports crop production and trade, which are currently Nigeria’s largest and second-largest sectors, respectively.
Prior to this, agriculture was Nigeria’s largest industry, accounting for more than 20% of the country’s GDP. Crop cultivation, cattle, forestry, and fishing were some of its subsectors.
Crop production has been separated from agriculture this time and is now the second-largest industry in the country. In 2024, agriculture accounted for 28.65 percent of the total GDP in the third quarter (Q3).
After being absorbed into information and communication, telecommunications is now the fourth-largest and stand-alone industry. In the third quarter of 2024, information and communication accounted for 16.35% of the GDP.
In the newly rebased GDP figures, crude petroleum and natural gas, construction, food, beverages, and tobacco rank as Nigeria’s fifth, sixth, and seventh largest sectors. Public administration, however, has been completely displaced from the top seven.
Real Estate Growth
The real estate sector continues its upward trajectory. In Q3 2024, nominal growth for real estate services reached 46.52%, significantly higher than the 2.82% recorded for the same period in 2023 but slightly below the preceding quarter. The sector grew by 16.15% on a quarter-on-quarter basis, contributing 5.43% to real GDP, slightly lower than the 5.58% contribution in Q3 2023.
Despite challenges such as declining purchasing power, demand for real estate in Nigeria remains strong. Estimates place the country’s housing deficit at around 28 million units, requiring an annual addition of 700,000 new homes to bridge the gap.
Future Potential
According to Statista, Nigeria’s real estate market is projected to reach $2.61 trillion by 2025. Residential real estate leads the sector, with an anticipated market volume of $2.25 trillion by 2025. The market is expected to grow at a compound annual growth rate (CAGR) of 6.91% between 2025 and 2029, achieving a volume of $3.41 trillion by 2029.
Globally, the United States is forecasted to dominate the sector, with a projected value of $136.6 trillion in 2025. In Nigeria, the demand for luxury apartments in major cities is driving significant growth within the real estate market.
Why GDP Rebasing Matters
The National Bureau of Statistics (NBS) has initiated the rebasing of Nigeria’s GDP and Consumer Price Index (CPI) to reflect the country’s current economic realities better. This critical exercise, recommended by the United Nations Statistical Commission every five years, was last undertaken in 2014. That rebasing increased Nigeria’s GDP by 89%, solidifying its position as Africa’s largest economy.
The 2024 GDP Rebasing Framework
Moses Waniko, technical assistant to the statistician general, highlighted the details of the ongoing rebasing at a workshop organized by the Nigerian Economic Summit Group (NESG) in collaboration with the NBS. The base year has shifted from 2010 to 2019, incorporating emerging sectors like the digital economy, modular refineries, pension fund administration, the national health insurance scheme, and mining.
Implications for Economic Planning
Waniko emphasized that rebasing extends beyond mere GDP recalculations. It serves as a foundation for robust economic and development planning, reflecting the evolving structure of the economy. Key anticipated outcomes include:
- Improved Economic Trajectory: Rebasing provides updated insights into sectoral contributions, enabling policymakers to understand economic distribution and growth dynamics better.
- Increased Economy Size: A larger GDP may improve metrics, such as reduced debt-to-GDP ratios and higher per capita income.
- Enhanced Policy Accuracy: Rebasing ensures that economic policies are data-driven and aligned with current realities by accounting for industry shifts and consumption patterns.
Addressing Structural Changes
Statistician-General Adeyemi Adeniran stressed the importance of rebasing in capturing the transformative changes in Nigeria’s economy. As new industries emerge and consumption patterns evolve, the updated statistical framework provides a clearer picture of economic activity, ensuring that indicators like GDP and CPI accurately reflect the nation’s economic landscape.
This rebasing exercise adjusts Nigeria’s economic metrics and provides a roadmap for sustainable growth and better-informed decision-making.
