• Saturday, April 13, 2024
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BusinessDay

As middle class grows, global brands hit Nigeria

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Inside this 1950s-style American diner, waitresses softly sing along to Aretha Franklin as they sling hamburgers and whip up milkshakes. The jukebox belts out Ritchie Valens as a customer wearing a Muslim prayer cap and flowing blue robes ambles in.

This isn’t the U.S., where the kitsch restaurant chain Johnny Rockets has several hundred locations, but instead Nigeria, where foreign companies have hesitated to invest because of logistical challenges, poor electricity and government corruption, reports AP.

Now, however, as Nigeria’s middle class grows along with the appetite for foreign brands, more foreign restaurants and lifestyle companies 

are entering the country. And the draw on Nigerians’ new discretionary spending has also put new expectations on providing quality service in a nation where many have grown accustomed to expecting very little.

“It really is impressive to go out to places and see places filled with everybody from all different walks of life”, said Christopher Nahman, the managing director at the Johnny Rockets in Lagos. “Nigerians are a very aspirational society also. Even somebody who it might be really kind of a burden on them financially, they will still do it to just have that experience.

“It’s very encouraging moving forward because that’s what you need to sustain an economy. … There’s no going back”.

The majority of those who live in Nigeria, home to more than 160 million people, live in poverty. Just more than 60 percent of Nigerians earn the equivalent of less than $1 a day, according to a 2012 study published by the National Bureau of Statistics. For decades, only tiny sliver of the population either involved in the country’s oil industry or its government roundly criticised for corruption had access to wealth.

The end of military rule in 1999 saw the country’s economy slowly open up, with new professional jobs being added in banks and the rapidly growing mobile phone market. That gave birth to Nigeria’s rapidly growing middle class, whose members earn about $480 between $645 a month and represent nearly a quarter of the country’s population, according to a September 2011 study by investment firm Renaissance Capital.

Over time, those figures started to attract businesses that previously hadn’t been working in Nigeria. In retail, South African firms have flocked into Nigeria, finding places in the new malls being opened around Lagos. MassMart Holdings Ltd., of which Wal-Mart Stores Inc. of Bentonville, Arkansas, owns a controlling stake, has its Game department here. Supermarket chain Shoprite Holdings Ltd., considered a budget grocer at home in South Africa, draws a more-upscale crowd in Nigeria, where most still shop for food in open-air markets.