Industry & Mining
From The Report: Nigeria 2019
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Nigeria presents considerable potential to return high yields on investment in the manufacturing industry. The administration has introduced a range of incentives to launch and broaden activities in various manufacturing segments, including agro-processing, biofuels, cement and automobiles. Coupled with the country’s broad resource base, the large and growing working-age population and the government’s renewed commitment to diversifying the economy through industrial development, conditions are right to achieve the ambitious output, employment and export rates proposed in plans like the Economic Recovery and Growth Plan. As for the mining sector, home to abundant, untapped reserves, and increasingly the focus of pro-business policies, the sector is poised for robust near and midterm growth as investors move to capitalise on opportunities in iron ore, gold, zinc and lead, among others. This chapter contains an interview with Jean-Marc Ricca, Managing Director, BASF West Africa; and a roundtable with Chris McAllister, Managing Director, British American Tobacco Nigeria and West Africa; Ben Langat, Managing Director, FrieslandCampina WAMCO Nigeria; and Yaw Nsarkoh, Executive Vice-President Ghana and Nigeria, Unilever.

Articles from this Chapter

Overview

Silver linings: Poised for revival as investors capitalise on favourable trends
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Founded on its diverse agricultural base, abundant mineral and petroleum reserves, and a young and growing population of workers and consumers, Nigeria presents considerable potential to return high yields on investment in manufacturing segments. While the discovery of hydrocarbons and rising crude prices created a dependence on export receipts and tax revenues and marginalised industry’s development, the crash of the global oil market in 2014 helped to refocus public policy on economic diversification…

Analysis

Revving the engine: As the price of crude oil climbs, public and private stakeholders are looking to use revenue to fuel motor vehicle growth
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Automobile manufacturing is poised for accelerating growth over the medium term, as major carmakers like Nissan, PSA Group and Volkswagen move to revive, expand or build new manufacturing and assembly bases in-country. These firms and their domestic partners should reap the potential dividends of Nigeria’s large and growing automotive market, as well as recent protectionist initiatives that have effectively curbed expensive vehicle imports. Although the industry has struggled with supply-side parts…

Interview

Challenging the complexity: Jean-Marc Ricca, Managing Director, BASF West Africa, on the challenges of localisation and regulation for manufacturers
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Interview :Jean-Marc Ricca What are some of the biggest obstacles faced by manufacturers in Nigeria? JEAN-MARC RICCA: Localisation is the key issue for the manufacturing industry, especially when it comes to operating within local capabilities. This includes the need for locally available smart supply chain solutions, technical expertise, business developers, financial capabilities and raw materials. The lack of maturity in the chemicals value chain, for instance, and the need to import raw…

Overview

Driving consumption: Chris McAllister, Managing Director, British American Tobacco Nigeria and West Africa; Ben Langat, Managing Director,
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Interview : Chris McAllister,Ben Langat &Yaw Nsarkoh What are some of the main infrastructure challenges that fast-moving consumer goods (FMCG) companies face in Nigeria? CHRIS MCALLISTER: Energy provision is a huge burden on local manufacturers. The absence of reliable grid power is a major constraint on the cost competitiveness of Nigerian products in both the domestic and export markets. If Nigeria is to be developed through industrialisation and export-led growth, it is vital…

Analysis

Cementing gains: While high logistics costs remain a challenge for segment growth, demand and earnings are expected to rise in the near term
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Amid the tentative recovery from recession, the cement market grew rapidly in the first half of 2018, as sales by volume increased by 9.8% over the first half of 2017, from 10.2m tonnes to 11.2m tonnes. The Nigerian manufacturer Dangote Industries led the way in that growth, as sales of locally produced materials grew by roughly 11% between those same periods, from 6.6m tonnes to 7.3m tonnes, and grew the firm’s market share to 65.7%. Meanwhile, the Nigerian operations of Lafarge Africa, itself…

Analysis

Domestic moves: Major manufacturers of fast-moving consumer goods have been supported by an expanding domestic market
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Growth of the population, set to reach 300m by 2030 and 400m by 2050, coupled with an expanding middle class, suggests there is strong growth potential for the fast-moving consumer goods (FMCG) segment, and underscores the fundamental attractiveness of the Nigerian market. In addition to these long-term drivers, manufacturers are set to benefit from improved economic performance in 2018. According to the IMF’s “World Economic Outlook” published in October 2018, GDP growth is expected to reach…

Overview

Into high gear: Economies around the world are preparing for the opportunities and challenges brought about by the next industrial revolution – Nigeria
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The global economy is entering the Fourth Industrial Revolution (4IR), or Industry 4.0, based on the application of new digital and automated technologies in production processes and service delivery. These changes are presenting emerging markets with opportunities such as improved productivity, as well as risks, namely reshoring and the displacement of human labour by automation. Wealthier emerging markets, such as the Gulf states, that have the resources to invest in new technologies, and those with better established manufacturing sectors, such as countries in Southeast Asia, appear best placed to reap the benefits of the 4IR. Many of these…

Overview

Digging down: Buoyed by strong growth, investors are taking a hard look at the country’s underground resources
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Although the oil and gas sector has driven economic growth in recent decades, Nigerian mining offers considerable potential gains. Home to abundant, untapped reserves, and increasingly the focus of pro-business policies, the sector is poised for robust near- and midterm growth as investors move to capitalise on opportunities in iron ore, gold, zinc and lead, among others. Supported by a host of incentives, an increase in investment from large multinationals should help the government meet its mid-term…