Sub-Saharan Africa has done relatively well post-2008 in comparison with the rest of the global economy, with many countries in the region possessing fantastic demographics and long-term room for growth. In our view, Nigeria is a cut above. Indeed, the country has one of the strongest performing economies in BMIs recently launched risk/reward ratings for Sub-Saharan Africa, behind only South Africa.
Largely known for oil until recently, private consumption is going to become increasingly important to the Nigerian economy over the next few years. Although the country is still very poor on a per capita basis and divided very unequally by income, there are now more reasons to be optimistic about its domestic demand potential than ever before. We expect strong economic growth in Nigeria over our forecast period as investment into the non-oil economy picks up.
Average annual real GDP growth of 6.4% between 2004 and 2009 is expected to be bettered through 2016, and increased consumer spending will be one of the main features of this economic expansion. As the economy diversifies away from the oil sector, we expect that public investments into infrastructure and the rising consumer class will help to drive growth.Headline Industry Data
- 2011 per capita food consumption, local currency = +17.02%; forecast compound annual growth to 2016 = +15.60%
- 2011 beer volume sales = +11.10%; forecast compound annual growth to 2016 = +9.80%
- 2011 mass grocery retail sales = +33.10%; forecast compound annual growth to 2016 = +33.60%Key Industry Trends & Developments
Nestlé Nigeria Going Strong: Nestlés Nigerian subsidiary has been growing fantastically over the past few years, and its share price has thoroughly outperformed the benchmark Nigeria All-Share index in the process. Nestlé has been investing heavily in Nigeria, and considering the countrys vast potential and room for growth, much of the firms growth has been coming from a relatively low base. Nestlés Nigerian business recently recorded a 23% increase in Q311 revenues to NGN57.3bn (US$360mn).
Private Equity Fund Silk To Invest More Than US$200mn: Investor interest in Africa has previously been focused on resources or land; the idea of investing in search of returns from the growing spending power of the end-consumer is a relatively new phenomenon. In an example of this strategy, UK-based asset management firm Silk Invest is launching a private equity fund in excess of US$200mn targeting food and drink processing companies in particular. It is believed that Silk will look to put equity capital into end-processing companies such as biscuit and drinks producers. Silk is believed to be targeting firms in Ghana, Kenya and Nigeria, among others. In our view, Kenya and Ghana both have reasonably welldeveloped food and drink industries and can offer promising targets for Silk.The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.
Click for Report details:Nigeria Food and Drink Report Q1 2012