Cooling inflation steadies Nigeria’s construction sector outlook

Nigeria’s construction and real estate sectors are seeing cautious optimism as inflation eases to 15.10 percent and the naira shows relative stability, industry stakeholders said at the NBCC Construction & Real Estate Outlook 2026 in Lagos on February 17.

The moderated inflation, combined with narrower foreign exchange spreads, is helping developers and investors regain planning visibility after years of cost uncertainty and volatile pricing.

The event convened economists, tax advisers, legal practitioners, and risk managers to examine how fiscal, monetary, and insurance reforms are reshaping project financing, capital flows, and sector resilience. Speakers stressed that easing price pressures alone will not guarantee sustained growth, but it lays the groundwork for more predictable investment conditions.

Kenneth Erikume, partner, tax reporting and strategy at PwC Nigeria, said long-term capital commitments in construction require policy clarity and regulatory consistency. “Sectors such as construction rely on structured financing. Sudden shifts in tax administration or compliance requirements could undermine recovery momentum,” he said.

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The panel highlighted the growing importance of resilience and risk management. Abimbola Onakomaiya, managing director and CEO of PeakThrust Insurance Brokers Limited, noted that developers are increasingly embedding financial buffers, structured risk assessments, and comprehensive insurance coverage into project frameworks, following the shocks of recent years.

“Stability improves planning, but risk does not disappear,” she said.

Legal considerations were also emphasised. Gbenga Ismail, principal partner at Ismail & Partners, said contract enforcement and transparent dispute resolution mechanisms remain essential for attracting both domestic and foreign investment. Secure property rights and clear regulatory frameworks are foundational to the sector’s expansion, he added.

Moderated by Dolapo Omidire, founder and CEO of Estate Intel, the discussions underscored the role of data-driven decision-making as reforms alter cost structures, financing assumptions, and project timelines across the industry.

While 15.10 percent inflation is still above comfort levels for many operators, stakeholders described the moderation as a shift from crisis management toward structural recalibration. “In a complex, non-linear environment, businesses that embed resilience and leverage technology will be best positioned to thrive,” said Biodun Adedipe, founder of B. Adedipe Associates.

The sector’s economic relevance was highlighted by data showing real estate’s contribution to GDP was formally repositioned in 2025, with construction and real estate combined accounting for 17–19 percent of the economy. Panelists said that macro stability and institutional certainty will be key to sustaining this trajectory, particularly as infrastructure activity accelerates ahead of the 2026 election cycle.

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Participants also stressed the strategic role of fiscal and insurance reforms. Improved tax clarity and aligned insurance requirements could strengthen investor confidence, while digital adoption and proactive risk management will be critical for firms navigating ongoing market uncertainties.

The stakeholders said targeted capital deployment, pre-election infrastructure projects, and clearer macro signals may trigger renewed investment in both sectors. But they warned that long-term growth depends on translating reform momentum into tangible project delivery and sustained institutional support.

“The challenge ahead is ensuring that macro stability translates into projects on the ground,” said Erikume.

With reforms taking hold, 2026 could mark a turning point for the sector if both government and private actors sustain focus on delivery, compliance, and risk management.