• Monday, May 27, 2024
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Eastern Nigeria turns into rapid growth market


Five years ago the current MD of a listed Nigerian multinational was in London to interview for the post amid skepticism from the parent company about growth prospects, outside the Lagos and western axis of Nigeria.

“I was told there were little or no opportunities for growing the business substantially in Nigeria,” he tells business day.

“That was one of the reasons why I took the job.”

The large swathe of Nigeria spreading from Benin to as Far East as Calabar and from Anambra to Bayelsa has become a rapid growth market for consumer goods, which is leading to a rush by Nigerian and multinational firms to set up factories in the region.

Nowadays the multinational is shopping for a suitable location in the region to site its new 100 million pounds (N24.1 billion) factory, according to the MD.

Nigerian Breweries (NB) Plc, in February 2013 commenced the 100 percent expansion of its production facility in Aba, Abia State with investments worth N15 billion.

SAB Miller recently built a new $100 million plant at Onitsha; Shoprite is expanding in Anambra, and Owerri in addition to its Enugu retail outlets, while GZ industries is setting up what would be the largest aluminium can manufacturing plant in Africa with its N1.2 billion investment in Aba.

“If our sales target in the Eastern part of Nigeria is achieved then it means the national target will be met, there is a lot of money flowing there and it currently makes up 40 percent of our national consumption figures,” the MD added.

A couple of powerful trends are driving the trend, which include a young and growing population, rising real incomes and an increase in State Government spending due to derivation.

The eleven South East and South South states had a combined 2013 budget of N2.64 trillion ($16.7 billion)- equivalent to 50 percent of the Federal budget- according to data compiled by business day’s research unit.

Spending on capital projects approach 75 percent of the budget in some states like Akwa-Ibom leading to a multiplier effect, and helping to create jobs and drive income growth.

The states also have a young and increasingly well educated population, whose aspirational lifestyle often influences their spending patterns.

States in the region also come out tops in terms of WAEC and JAMB applications and female literacy levels, and while Lagos is Nigeria’s economic powerhouse and commercial capital, and boasts the largest sub-national economy in Nigeria, at close to $50 billion, Rivers State has a higher GDP per capita ($3,965) which is 160 percent above the national average.

“Uyo, Aba, Port Harcourt, Onitsha-Asaba, Benin and Bayelsa are the new regional hubs for business in Nigeria. I have doubled my staff strength in Eastern Nigeria,” the MD said.

“The next 10 to 15 years will see phenomenal growth in these areas.”