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Retail chains will face expansion hurdles in Nigeria

Monday, January 12, 2015

Subject

Challenges facing the retail sector in Nigeria.

Significance

Featuring sub-Saharan Africa's (SSA) largest and growing consumer base, Nigeria is central to international retailer expansion strategies on the continent. Led by firms such as grocery chain Spar and consumer goods firm Unilever, they are utilising a variety of strategies, eg, online sales and networks of local traders, to try to manage the country's difficult operating environment.

Impacts

  • Cuts to capital expenditure's share of the budget (from 31.1% to 14.2%) will hamper the government's ability to improve infrastructure.
  • By reducing imports, rising domestic agricultural production will partially help offset the effects on consumers of oil-related volatility.
  • Protection from imports for the domestic cement industry will boost profits -- in particular facilitating Dangote's expansion across Africa.
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