COVID-19 and the Construction Sector

Must Read

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
- Advertisement -

It is no longer news that the disruption brought by COVID-19 has crippled economic activities, raising concerns of an impending recession for a Nigerian economy that is yet to fully recover from the 2016 economic slump.

Already, the International Monetary Fund (IMF) has predicted a negative Gross Domestic Product (GDP) of 3.4% for the country. In our opinion, the impact on different sectors will vary depending on the dynamics prevailing in various sectors, the duration of the lockdown, the effectiveness of containment efforts and stimulus measures put in place by policymakers.

COVID-19 and the Construction Sector - Brand Spur

The construction sector is one sector we believe will be badly hit owing to reduced CAPEX spending by the government given weaker earnings particularly oil revenue. We highlight that the Federal Government has reduced the amount budgeted for capital expenditure by 20% in the 2020 budget.

- Advertisement -

Also, we believe most construction projects across the nation may have been suspended in the interim owing to COVID -19 restrictions. Our expectation is that full resumption of construction activities is unlikely to commence until H2-2020.

In 2016 when the economy went into a recession, the construction sector declined by 5.9% compared to the growth of 4.4% recorded in 2015. Subdued activities in the construction industry had a spillover effect on the cement sector, where growth slowed drastically from 22.1% in 2015 to a negative growth of 5.4% in 2016.

Read Also:  Maintaining Banking System Safety Amid the COVID-19 Crisis

Although, we acknowledge that the fiscal authorities are considering an external borrowing program to raise US$6.9bn to finance the 2020 budget and the Central Bank of Nigeria CBN also plans an N1.5tn fund for financing infrastructure projects, these measures in our view may help stem a deeper recession in the construction sector but are unlikely to avert a downturn in 2020.

CSL Research

- Advertisement -
COVID-19 and the Construction Sector - Brand SpurCOVID-19 and the Construction Sector - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

COVID-19 and the Construction Sector - Brand SpurCOVID-19 and the Construction Sector - Brand Spur

Latest News

Court Convicts Unity Bank Plc Vault Room Manager

The Maiduguri Zonal Office of the Economic and Financial Crimes Commission, EFCC, has secured the conviction Adam kaka Adam,...

Here’s What You Need to Know About Local Digital Marketing for Franchises

As a franchisee, you get a lot more support in running your business than you would if your location was an independent brand, but...

Why businesses should ensure data privacy in vendor relationships – Andrew Bourne

Whether we realize it or not, we are being tracked everywhere we go on the Internet. In fact, Internet surveillance is so widely used...

Local Bourse Kick-Start December on a Positive Note, Gain 0.30% to Sustain Uptrend

The local bourse today (Tuesday) began the month of December on a positive note, as the market performance index, the ASI, gained 0.30% to...

Google launches People Cards to help Africans who want to be found on Google Search

1 December 2020 - Google today introduced a new mobile-only feature that makes people more discoverable on Google Search. People Cards allow people to...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -COVID-19 and the Construction Sector - Brand SpurCOVID-19 and the Construction Sector - Brand Spur