Interview: Jean-Marc Ricca
In what ways has the Covid-19 pandemic affected industry and consumers in Nigeria?
JEAN-MARC RICCA: The economy was already under pressure before the Covid-19 pandemic due to subdued growth, low oil prices and currency issues; and the health crisis exacerbated these issues. However, due to the fact that industry was considered essential, production was not significantly disrupted. While measures related to the lockdown had a negative impact on consumption in the initial phase as depressed levels of economic activity lowered the population’s purchasing power – particularly in relation to beauty products – by the first quarter of 2021 we saw evidence of a recovery. Indeed, sales of beauty products reached pre-pandemic levels in the early months of that year. A full recovery will of course take time, but the process stands to benefit from Nigeria’s large population.
How will recently implemented trade agreements impact intra-continental commerce, especially among West African countries?
RICCA: The African Continental Free Trade Area (AfCFTA) is a welcome and long-overdue development, both for Nigeria and the wider continent. Boosting infra-African trade, and reducing tariff and non-tariff barriers is essential for Africa’s economic expansion. However, several additional steps need to be taken by participating countries – including Nigeria – to ensure the agreement meets its potential. Nigeria has a lot to gain from the proper implementation of the AfCFTA, but even as there is political will to push this agreement forwards and increase intra-African trade, there are several structural issues that should be addressed.
It will likely take years, or even decades, to realise the level of free trade laid out in the agreement. One of the most significant burdens on Nigeria and West Africa’s economic development is the lack of adequate infrastructure, as well as protectionism and heavy regulations. Only after these challenges are alleviated can there be significant progress in terms of intra-African trade, and higher levels of economic growth and social development.
To what extent have current currency-related policies on foreign investment affected foreign investment in manufacturing?
RICCA: While companies face many challenges operating in Nigeria, the currency issue and the instability associated with a system of different exchange rates is perhaps the most notable. Foreign firms are unable to operate without having access to foreign exchange or being able to move capital abroad, and this has caused several disruptions and operative limitations. The currency situation also severely pressures our capacity to plan ahead and invest more in the country, both of which would have a positive impact on the job market.
What can be done to support research and development (R&D) and innovation?
RICCA: Nigeria is a country of young people, with over half of the 200m population under the age of 18. It is also tech-savvy and innovative, a combination that has helped it become a regional centre for ICT. Indeed, this supportive ecosystem has led to the creation of a range of new solutions for challenges throughout the value chain. Nigeria’s financial technology companies are among the best performing and most dynamic on the continent, and innovation has disrupted a range of sectors, from health to education to agriculture to logistics. However, even as there is a burgeoning ICT ecosystem, there remains a need to boost investment in education, training and human resources to fully leverage these developments. As such, the private and public sector should cooperate to boost investment in R&D.