Inflation Cripples Nigeria’s Construction Sector as Developers Struggle to Keep Projects Afloat

Samuel Mobolaji

The construction industry in Nigeria is slowing down as developers and contractors grapple with skyrocketing inflation, a weakening naira, and harsh macroeconomic conditions.

Despite rising demand for housing, inflation has made it increasingly difficult for stakeholders to maintain project momentum, leading to stalled construction sites and unfinished developments across the country.

According to industry experts, the combination of high inflation, retail inflation, and unfavourable exchange rates has severely impacted the real estate sector. Debo Adejana, a realtor and director at the School of Estate and Business, noted that soaring construction costs and shrinking disposable incomes have led to sluggish sales, making it difficult for developers to complete ongoing projects.

“Construction prices are going up, but people’s purchasing power is shrinking. This imbalance has slowed down activity at many construction sites, with some becoming completely dormant,” Adejana explained during a media briefing in Lagos.

Dapo Runsewe, a senior analyst at Estate Intel, echoed these concerns, stating that Nigeria’s difficult macroeconomic environment has forced developers and investors to adopt a cautious approach. As a result, both the rental and retail property markets have suffered, with many businesses downsizing or exiting the market altogether.

Runsewe added that while hypermarkets and neighbourhood supermarkets are driving some activity, major retail developments, which account for 70 per cent of upcoming projects, remain on hold.

As Nigeria’s construction sector faces these headwinds, industry players are calling for solutions to address the inflation crisis and restore momentum to one of the country’s key economic pillars.