Industry & Retail
From The Report: Nigeria 2016
View in Online Reader

The industrial sector of what is arguably Africa’s largest economy is a diversified group of producers and outputs. With a wide range of accessible feedstock, from agricultural products to hydrocarbons, along with Africa’s biggest consumer market, the possibilities are substantial. The volume of output is small, however, and Nigeria is forced to import most of what it consumes, including the raw materials and intermediate goods its industries use. Cyclical pressures, along with structural challenges, have contributed to a challenging environment. Yet this has not slowed capital spending, and with a large consumer market the outlook is encouraging for many industrial segments. The retail sector is based on the latent potential of Nigeria’s population, currently estimated at 184m and growing. Firms hoping to cater to that block of consumers must overcome challenges such as finding land to build retail space, importing goods and managing currency risk. The central’s bank decision to change its currency policy is currently the most important factor for the retail sector. Once retailers gain some certainty on that, the next steps will likely be to take stock of balance sheets and capital requirements, then begin the process of utilising current retail capacity at malls.

This chapter contains an interview with Okey Enelamah, Minister of Industry, Trade and Investment.

Articles from this Chapter

Overview

Moving forward: Despite challenges, the sector is investing in increased capacity
OBG
plus

The industrial sector of what is arguably Africa’s largest economy is a diversified group of producers and outputs, ranging from the large-scale cement plants of Dangote Group, the continent’s largest cement producer, to cottage industries such as plantain chips. With a wide range of accessible feedstock, from agricultural products to hydrocarbons, along with Africa’s largest consumer market, the possibilities are substantial. The volume of output is small, however, and Nigeria is forced to…

Analysis

Open door: Recent free trade negotiations have generated much debate
OBG
plus

The global trend towards more open trade has in recent years faced a number of setbacks, ranging from stalled World Trade Organisation talks to rising protectionism and the UK’s vote to leave the EU. Nigeria is no exception, where a push to increase import substitution, which is intended to reverse a decline in foreign exchange and reduce the non-oil trade deficit, is being rolled out at the same time as the 184m-person, $520bn economy is engaged in negotiations on new trade agreements. Successive…

Interview

The right response: OBG talks to Okey Enelamah, Minister of Industry, Trade and Investment
OBG
plus

Interview:Okey Enelamah What role does the ministry expect to play in Nigeria’s broader economic strategy? OKEY ENELAMAH: The president has outlined three priorities for the administration: to create a secure environment throughout the country, to put an end to the widespread corruption, and to boost the economy through initiatives that foster growth. Diversifying the economy away from oil is critical; despite contributing only 10% to GDP, the commodity at one point accounted for 90% of…

Analysis

Mixed signals: Recent foreign exchange controls have led to varied reactions among manufacturers
OBG
plus

One of the most visible policy moves by Nigerian authorities in 2016 has been to limit access to foreign currency in the country. The decision to institute capital controls was rolled out as a result of low oil prices, which have led to a drop in dollar-denominated export revenues and put the naira under increasing pressure. To limit the need for the Central Bank of Nigeria (CBN) to use up its foreign reserves defending the naira, the government opted to refuse the release of foreign exchange (forex)…

Analysis

Make it snappy: The fast-moving consumer goods segment is looking for specialised products and efficient distribution
OBG
plus

As the country grapples with the consequences of recent economic challenges, Nigeria’s fast-moving consumer goods (FMCGs) market has proven fairly resilient in 2015 and 2016, with consumers retreating to low-cost staples as their spending power diminishes. “Expensive alternatives are now less attractive, and lower-priced products are filling the gap,” Joan Ihekwaba, general manager for marketing at UAC Foods, told OBG. Nonetheless, expenditure on food dipped in 2015 to the lowest level since…

Overview

Unlocking potential: The continent’s most populous nation offers ample opportunities for a variety of retailers
OBG
plus

The retail sector in Nigeria is based on the latent potential of Nigeria’s population, currently estimated at 184m and growing. Firms hoping to cater to that block of consumers must overcome challenges such as finding land to build retail space, importing goods and managing currency risk. The naira, under pressure since the drop in oil prices began in mid-2014, has made imports more expensive and pushed up inflation, while the growing middle class in Nigeria is not as large or resilient as previously…

Analysis

Stuck in the middle: Recent economic challenges have affected consumer spending
OBG
plus

The popular “Africa Rising” narrative has largely been predicated on the emergence of a growing middle class on the continent, providing a steady rise in consumer demand to go with the increased export receipts and lower public debt burdens seen across Africa. But with oil prices falling since mid-2014, along with a rising US dollar and slowing demand in China, this theory has been challenged. Africa may have an emerging middle class with more spending power now than in previous decades, but…