Multiple Taxes, Regulations Now Hurt Construction Sector More Than Insecurity, Says NESG

Multiple taxes and regulatory requirements have replaced insecurity as a major worry for construction firms in Nigeria, according to the Nigerian Economic Summit Group (NESG).
In its Construction Sector Report, titled “From Cyclical Growth to Durable Investment,” the NESG said the regulatory and tax burden is now the second major issue facing the sector, after inadequate power supply.

The report is based on the NESG Business Confidence Monitor, which asks firms to rank the top constraints to doing business.

Tax, regulation rise in ranking
The NESG said multiplicity of tax regulations ranked second in the first half of 2026 with a score of 9. Regulatory requirements also scored 9 and ranked third.

The report said the development is “a shift from earlier periods” when insecurity and financing featured more prominently.
Data in the report show that multiplicity of tax regulations ranked fourth in 2025 and in the first half of 2025, each time with a score of 7. It has now moved up to second place.

Insecurity, on the other hand, scored 10 in 2024 and 7 in 2025. It ranked second with a score of 9 in the first half of 2025 but has now dropped out of the top five.

The NESG said inadequate power supply remains a persistent structural constraint for the sector. It ranked first in 2025, in the first half of 2025 and in the first half of 2026, each time with a score of 10. In 2024, it ranked second.

Limited access to financing and unclear economic policies followed, each with a score of 8.
The report also said foreign exchange availability, which ranked fifth in 2024, is no longer among the top five constraints. The NESG described the declining prominence of insecurity and foreign exchange as encouraging

The report said the concerns come at a time when the construction sector is growing faster than the economy as a whole. It said the sector grew by 6.4 percent in the first half of 2026, up from 5.5 percent in 2025 and 4.2 percent in 2024.

The NESG said construction has the strongest business conditions of the sectors it assessed. It added that it is the only one where current investment has moved into expansion. The Investment Index rose from 85.0 in the first half of 2025 to 113.9 in the first half of 2026.
The Overall Business Conditions Index stood at 117.7, above the 100 benchmark that separates expansion from contraction.

The Cost of Doing Business Index, however, stood at 79.5, still below the benchmark. It was 60.7 in the first half of 2025.

Despite the strong performance, the NESG said current demand and new orders have softened. The Demand Condition Index fell from 106.8 to 97.3 within a year, while the Supply Order Index fell to 97.4.

The report said the sector’s challenge is to convert current momentum into durable investment. It said this will depend on long-term finance, reduced regulatory delays and more reliable payment mechanisms.

The NESG also urged stronger links between construction and local manufacturers of cement, steel and fabricated materials, so that the sector’s growth can spread to the wider economy.