Industry & Retail
From The Report: Nigeria 2012
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Nigeria’s industrial sector is quite small overall, accounting for less than 1% of GDP, but some fields are expanding rapidly. The cement segment, for example, has grown rapidly in recent years, and in 2012, the country produced enough cement to meet local market demand for the first time. Authorities are also planning to use the country’s rising natural gas output as industrial feedstock, positioning Nigeria to become a regional centre for petrochemicals manufacturing. In retail, local press reported in August 2012 that a record $1.3bn in foreign investment had come into the sector over the preceding two years. A prime example of foreign investment in the sector is the South African supermarket champion Shoprite, Africa’s largest retailer. In the clothing arena, French lingerie and swimwear firm Etam opened an outlet at The Palms in April 2011, while Spain’s Zara set up shop at Lagos’ Silverbird Galleria in February 2012. With its population of about 164.8m, Nigeria is a potentially lucrative market.

This chapter contains interviews with Olusegun Aganga, Minister of Trade and Investment; Kola Jamodu, President, Manufacturers Association of Nigeria; and Oba Otudeko, Chairman, Honeywell Group.

Articles from this Chapter

Overview

Recognising potential: The government promotes manufacturing while the private sector invests in some key projects
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With its large population, its GDP still showing growth in the high-single digits in a recession-haunted world and its vast if underexploited natural resources, Nigeria is an attractive but challenging market for industrial firms. The sector is still quite small overall, accounting for less than 1% of GDP. Some fields are expanding rapidly, while others are starting to show signs of growth. There is certainly reason to accentuate the positive but by no means any cause to eliminate the negative.…

Interview

OBG talks to Olusegun Aganga, Minister of Trade and Investment
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Interview: Olusegun Aganga What are some of the effects you anticipate an environmental protection act (EPA) would have on the country’s production capacity? OLUSEGUN AGANGA: Inadequate safeguards in the EPA would lead to increased imports of manufactured and agricultural products from the EU, which would result in de-industrialisation as well as jeopardise rural employment and livelihoods. There have already been disagreements over the scope of the opening of West African markets to products…

Analysis

Manufacturing on the rise: The government is implementing an ambitious long-term industrial development policy
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Nigeria’s industrial sector is expected to grow considerably over the course of the coming decade, largely as a result of Vision 20:2020, the state’s overarching long-term economic development blueprint. Under the plan, which was introduced in 2010, the government aims to expand the industrial sector’s contribution to GDP from its current 4-5% to at least 25% by the end of the decade. To meet this ambitious goal, the state is working to ramp up domestic production of manufactured and processed…

Interview

OBG talks to Kola Jamodu, President, Manufacturers Association of Nigeria
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Interview: Kola Jamodu To what extent have policies concerning local content benefitted Nigerian industries? KOLA JAMODU: Although the Local Content Act is applicable only to the oil and gas industry, there is a firm policy regarding the patronage of locally manufactured products. The government is now willing to pay a bit more for domestically produced goods to encourage local manufacturers. One of the best ways to create and sustain job opportunities is for the government to empower and encourage…

Analysis

Glass half full: Competition in the market for beer heats up
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It is not Africa’s biggest market, but it is promising. According to Russian investment bank Renaissance Capital, Nigerian beer consumption in 2011 totalled around 19.5m hectolitres. At around 12 litres per head, that is a lot lower than the global average of 27 litres, and far below South African levels of 63 litres. But growth has been brisk: Renaissance puts the compound annual growth rate at 9.1% in the previous decade and, in 2011, forecast 13% for the coming one. POTENTIAL GROWTH:…

Interview

OBG talks to Oba Otudeko, Chairman, Honeywell Group
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Interview: Oba Otudeko by attracting investment for adequate refining capacity to produce different types of fuel for local consumption and export. The act has therefore thrown open a number of very significant business opportunities. What are keys to mitigating imported inflation and exchange rate fluctuations? OBA OTUDEKO: The keys are making the most of our abundant resources, increasing local manufacturing and looking for local substitutes so we import less. Over 50% of Nigeria’s land is…

Overview

Hard sell: Traditional markets are slowly giving way to modern shops
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The foreigners are here, and they appear willing to stay. With the Nigerian press reporting in August 2012 that a record $1.3bn in foreign investment had come into the retail sector over the preceding two years, outsiders are playing an ever greater part in an industry that – according to international consultancy Accenture – accounts for 19% of Nigeria’s GDP. Foreign investment in this area of the economy makes sense. Even if more than half of Nigerians are living at or below poverty level,…