Photo: LegalCouncil / Wikimedia Commons, CC BY-SA 4.0
Nigeria’s construction sector is growing, but builders say overlapping taxes, regulatory requirements and unreliable power are making that growth harder to sustain.
A change in the pressure points
The Nigerian Economic Summit Group (NESG) says multiple tax regulations became the second-ranked constraint facing construction firms in the first half of 2026, while regulatory requirements ranked third. Both received a score of nine in the group’s Business Confidence Monitor assessment.
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That marks a clear change from earlier surveys, when insecurity and access to finance featured more prominently among the sector’s biggest concerns. Insecurity, which was ranked second in the first half of 2025, no longer appeared in the top five constraints in the latest assessment.
Inadequate electricity supply remained the leading difficulty, with a score of 10. Limited financing and unclear economic policies followed the tax and regulatory burdens, each scoring eight.
Growth is not yet secure
The NESG reported that construction grew by 6.4 per cent in the first half of 2026, compared with 5.5 per cent in 2025 and 4.2 per cent in 2024. It also described construction as the strongest-performing sector in its business survey, with investment conditions moving into expansion.
Its investment index rose to 113.9 from 85.0 a year earlier, while the overall business conditions index reached 117.7. A reading above 100 indicates expansion.
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But the underlying picture remains mixed. The cost-of-doing-business index was still below the expansion threshold at 79.5, despite improving from 60.7 a year earlier. Demand conditions and supply orders also slipped below 100, signalling softer new business and activity.
Why it matters
Construction is central to Nigeria’s roads, housing, schools, hospitals and industrial development. It also supports a wide chain of Black-owned and Nigerian businesses — from artisans and engineers to cement suppliers, steel fabricators, transporters and small contractors.
When firms face repeated levies, delays in approvals and unpredictable compliance demands across different levels of government, costs can rise before a project even reaches the building stage. Those pressures can slow infrastructure delivery, limit hiring and make it harder for local contractors to compete for major work.
The NESG said the priority is to turn the current expansion into durable investment. It called for longer-term finance, fewer regulatory delays and more dependable payment mechanisms.
It also urged stronger connections between construction companies and domestic producers of cement, steel and fabricated materials. That would help ensure that growth in the building sector creates wider local industrial demand rather than relying heavily on imported inputs.
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The findings do not mean insecurity has ceased to affect construction workers and project sites. Industry unions have continued to call for stronger protection along infrastructure corridors. But the latest business survey suggests that, for many firms, the immediate burden of navigating taxes, regulations and energy costs is now taking centre stage.