RMB Westport in Nigeria

African property development jurisdictions

Lagos, the capital city of Nigeria, is one of the continent’s most populous cities. It is touted to become one of Africa’s mega-cities, with a predicted population approaching 20 million by 2025. Nigeria is Africa’s largest producer of oil and natural gas and it has the largest economy and population in Africa. In April 2014, an economic rebase saw Nigeria overtake South Africa to be the continent’s largest economy with a revised GDP of approximately US$488-billion.

RMB Westport’s projects in Nigeria, at various levels of completion, are:

Nigeria fast facts

Population:186 million
Population of Abuja:1.6 million
Population of Lagos: 10.4 million
GDP:US$488-billion
GDP per capita:US$4 740
Projected GDP Growth
(World Bank 2018):
2.4%
S&P Country Rating:B

Economy

  • Oil is the pillar of Nigeria’s economy as it stands as the largest oil producer in sub-Saharan Africa
  • Nigeria’s economy is diversifying rapidly, with non-oil sector growth outpacing the petroleum industry. The government has implemented a restriction on the importation of various goods in order to vitalise the local production systems
  • The country is seeing a recovery from the recession introduced by the oil price crash, with liquidity becoming more readily available and positive sentiment from multinationals rising

Context

  • Political landscape: Nigeria had a vibrant and tumultuous political life since its return to civilian rule in 1999, with tensions between the Christian and Muslim populations mirroring a North/South divide
  • Economy: The country is among Goldman Sachs’s next 11 emerging markets, yet Nigeria is still one of the most underinvested countries in Africa
  • Policy environment: Nigeria has a pro-reform government with incentive schemes for FDI
  • Infrastructural challenges: Power supply is intermittent and unreliable. In 2011, Nigeria produced 32 times less than the per capita power generation in South Africa

Retail and commercial property market

  • Rental levels in Lagos underwent a significant reduction in 2016/2017 arising from a reducted demand from tenants, due to foreign currency illiquidity (and the resultant weakening of the local currency against the USD). This lead to the oil price depression during the same period. This however, is changing with increasing oil prices and renewed interest from tenants
  • New formal retail and office developments have been introduced to the market over recent years, however, there still remains a dearth of supply in A-Grade retail and office developments
  • Sophisticated market – in 2013 Nigeria’s seven Shoprite stores sold more Moët and Chandon champagne than South Africa’s 361 Shoprite stores combined

*Sources: Economic intelligence unit; IMF; World Bank; RMB Global Markets Research; OECD