Preliminary figures from Nigeria’s ongoing GDP and CPI rebasing exercise show a significant shift in the structure of the country’s economy: the real estate sector has now overtaken oil and gas to become the third-largest contributor to the national economy.
A Changing Economic Landscape
Real estate now follows crop production and trade, which hold the top two spots. For years, agriculture has been the backbone of Nigeria’s economy, contributing a large share to the GDP. But with the latest rebasing, crop production has been separated from the broader agriculture category, making it the second-largest individual sector. Overall, agriculture—including livestock, forestry, and fishing—accounted for 28.65% of GDP in the third quarter of 2024.
Another notable change is the elevation of the telecommunications sector. Previously lumped under the larger “information and communication” umbrella, it’s now treated as a standalone sector and ranks fourth in size. Information and communication as a whole contributed 16.35% to GDP in Q3 2024, while trade came in at 14.78%.
Oil and gas, construction, and the food and beverages sector now sit in fifth, sixth, and seventh positions respectively. Public administration no longer features among the top seven contributors.
Real Estate Growth: By the Numbers
The real estate sector has shown impressive growth. In nominal terms, it grew by 46.52% in Q3 2024 compared to the same period last year. While this was slightly lower than growth seen in the previous quarter, it still marks a strong performance. Quarter-on-quarter, the sector expanded by 16.15% and contributed 5.43% to real GDP—just a slight drop from the 5.58% recorded in Q3 2023.
Despite economic headwinds like inflation and declining purchasing power, demand for property in Nigeria remains solid. Estimates suggest the country has a housing shortfall of around 28 million units, with roughly 700,000 new homes needed each year to meet demand.
Outlook for the Market
Nigeria’s real estate market is set to keep growing. According to projections from Statista, the sector could hit a total value of $2.61 trillion by 2025, with the residential segment leading at about $2.25 trillion. Looking further ahead, the market is expected to grow at a compound annual rate of 6.91% between 2025 and 2029—reaching roughly $3.41 trillion by the end of that period. On a global scale, the United States is expected to remain the world’s largest real estate market, with a projected value of $136.6 trillion by 2025.
In Nigeria, there’s particularly high demand for luxury apartments in urban centres, which continues to drive investment and growth in the sector.
Why the Rebasing Matters
The National Bureau of Statistics began this GDP and CPI rebasing exercise last year to better capture today’s economic realities. Experts recommend countries rebase their GDP every five years. Nigeria’s last update in 2014 resulted in a significant jump in GDP, establishing the country as the biggest economy in Africa at the time.
This new round of rebasing uses 2019 as the base year, replacing 2010. It includes newer and previously underrepresented sectors like digital services, modular refineries, pension fund management, the national health insurance scheme, and some aspects of mining.
According to officials involved in the process, this rebasing is about more than just numbers. It’s intended to provide a clearer picture of how Nigeria’s economy is evolving, helping policymakers make better decisions. It could also lead to changes in key economic indicators—like reducing the debt-to-GDP ratio and potentially raising per capita income as the size of the economy grows.
