What to know about third largest sector in rebased GDP

Nigeria’s real estate sector is gaining significant momentum as reflected in the rebased gross domestic product (GDP) where it emerged as the third largest sector in the Nigerian economy.

Valued at $2.14 trillion by the end of 2024, the sector has seen a 7.24 percent growth from the previous year and is projected to reach $2.61 trillion by 2025, with further growth to $3.41 trillion by 2029.

This growth trajectory partly explains the sector’s major shift from the first fifth to the third largest contributor to Nigeria’s economy, overtaking the once-dominant oil and gas sector.

From a sector that has, apparently, been struggling from the effect of an adverse macro-economy, especially soaring inflation that peaked at 34.80 percent in December 2024, this shift came as a surprise and an eye-opener.

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But players in the sector say they are not surprised, which is why Odunayo Ojo, chief executive of UPDC Plc, said, “In order to understand what made this new position possible, it is important to know what happened before and during the rebasing.”

Ojo, who was a guest at the BusinessDay Television where spoke on ‘Real Estate and GDP Rebasing,’ explained that there was a reclassification of some of the contributors to the economy, noting that there was an introduction of other components that were not in the basket originally.

“The GDP rebasing has offered a clearer picture of the country’s evolving economic landscape,3 with real estate now at the forefront as a major player,” he said, stressing that real estate has always been one of the top five or six sectors.

“For the sector to be growing, it means that players in the industry are doing a lot. The likes of UPDC are contributing their quota to the growth of the industry. Some other players are also doing their part. Again, there have been policy interventions on the part of the government that are helping the sector to grow and sustain it into the future,” he said.

In addition to Ojo’s submission, population growth, urbanisation, and rising middle class are also fueling expansion of the sector. With Nigeria’s population expected to hit 400 million by 2050, demand for housing, especially luxury apartments in major cities, is skyrocketing.

Expatriates and affluent Nigerians are, increasingly, seeking high-end residential properties, further driving and enhancing the sector’s value.

Abuduganiy Adebomehin, surveyor general of the federation, spoke to BusinessDay on the new status of this sector, emphasising the critical role of geospatial data in understanding and maximising the potential of Nigeria’s real estate market.

“The issue is, you don’t even know what you have,” Adebomehin stated, stressing the need for accurate mapping and data collection.

He explained that geospatial technology, such as digital twin systems that allow for real-time building counts, can revolutionise how real estate assets are managed and valued.

Adebomehin also criticised the underutilisation of geospatial data in Nigeria’s economic planning, saying, “When you talk about GDP, it’s about going geospatial,” advocating for surveyors to lead Geographic Information System (GIS) departments to ensure accurate and efficient data management.

He noted that geospatial data is pivotal not only for real estate but also for various sectors, including agriculture, where real-time monitoring can drastically improve productivity.

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The surveyor general highlighted the importance of integrating geospatial data into Nigeria’s broader development goals, pointing out that 14 of the 17 Sustainable Development Goals (SDGs) rely heavily on such data.

He, however, lamented that the Office of the Surveyor General is often excluded from critical planning processes, only being consulted when challenges arise that require accurate mapping and data interpretation.

Festus Adebayo, executive director of the Housing Development Advocacy Network, hailed the shift, stating that real estate will continue to play a significant role in Nigeria’s GDP growth.

“This shift reflects the growing importance of the real estate sector in the country’s economy,” Adebayo noted, emphasising the need for strategic policies to sustain this growth.

As Nigeria’s real estate sector continues its upward trajectory, experts stress the importance of leveraging technology and geospatial data to optimise land use, improve infrastructure planning, and ultimately drive economic growth.

The rebased GDP figures shows that the real estate market is no longer just a secondary player but a central pillar in Nigeria’s economic future.

Ojo is optimistic that “as more and more people are able to own homes and more people are able to utilise their pension account and take advantage of the news policies, you will see that even though the rebasing is in reclassification, the growth that is happening will be able to sustain the sector as one of the largest contributors going into the future.”