• 6th April, 2023

    • 1
      From Data That Affects You

      China the Biggest Beneficiary, as Nigeria’s Importation for Construction Rises

      As Nigeria's need for construction materials outstrips supply, the country looks to China.

      China the Biggest Beneficiary, as Nigeria’s Importation for Construction Rises

      The growing middle class in Nigeria are driving rapid urbanization in the country, as more young people continue to move into cities in search of employment. This is one of the factors behind the country’s high levels of construction material importation. Other key reasons could be the lack of trust in locally-made building products, and the large gulf between the country’s construction and manufacturing sectors, with the former, far outstripping the latter.  

      Nigeria’s younger population is more educated on average, and as a result, will be attracted to the white-collar job opportunities present in cities. This massive influx into cities such as Lagos creates the need for investment in buildings, both for residential and official purposes. This necessitates the need for materials such as roofing sheets, ceramic, and plumbing.  

      The country’s faltering manufacturing sector might be the major contributing factor to the reliance on imports. Nigeria has three major thriving major cement companies in Dangote Cement, BUA Cement, and Lafarge Cement. Accordingly, the country possesses West Africa’s largest cement sector and production capacity has grown by nearly 100% from 2014 to 2022. However, demand continues to outstrip supply. 

      Data from the National Bureau of Statistics (NBS) states that the contribution to Nigeria’s gross domestic product (GDP) from Construction is more than double that of all construction-related manufacturing sectors combined (Cement, Wood and Wood Products, Plastic and Rubber Products, Electrical and Electronics, Basic Metals: Iron and Steel). With construction rates firmly outstripping that of the manufacture of construction materials within the country, importation becomes inevitable.  

      There is also the matter of quality. Most Nigerians who can afford to will rather purchase and use imported building materials, believing this to be of greater quality than locally-manufactured items. Developers might import everything from furniture to lighting, ceramic roofing tiles to floor finishing. The material that developers are more likely to source internally if there can is most likely cement. Hence that sector is the highest contributing construction-related sector to the country’s GDP. 

      Nigeria’s reliance on importation for construction materials to service its rapid urban development can be seen in the country’s foreign trade data. In the five years between 2018 and 2022, imports in some selected construction-adjacent sections have risen: Plastics. Rubber, and related products by 95.46%; Wood and articles of wood (369.29); Articles of stone, plaster, cement, asbestos, mica, and ceramic (85.92%); and Base metals and articles of base metals (32.74%). 

      The leading source of construction materials, by some distance, is China. In the five years between 2017 and 2021, Nigeria imported $2.8 billion worth of construction equipment from China, 54% of all construction materials importation and more than the next nine import destinations put together.  

      According to Trading Economics, construction-related materials such as electrical and electronic equipment ($1.96bn), iron and steel ($672.77mn), particles of iron and steel ($531.20mn), aluminium ($134.72mn), and wood/wood articles ($122.25mn) are among Nigeria’s leading imports from China.  

      India accounts for 9%, with imports largely led by electrical/ electronic equipment and iron & steel. Germany (8%), the United States of America and the United Kingdom (5% each) totalled the top 5. Amongst all trade partners, electrical and electronic equipment import is prominent. Unsurprisingly, producing electrical and electronic equipment is the least contributing sub-sector in Nigeria’s manufacturing sector.  

      Production of iron and steel and related particles is also another sector whose poor performance has led to an overreliance on imports. A contributing factor to this may the extended failure to complete the Ajaokuta Steel Mill, a project which lies unfinished more than 40 years after construction commenced. 

      • Published: 6th April, 2023


      Emmanuel is an economic researcher and writer who likes to investigate systems, connect the dots, and find solutions.


      a year ago

      Which foreign companies are the major suppliers of building materials to nigeria


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