Boston, MA -- (SBWIRE) -- 05/05/2014 -- We continue to maintain our positive long-term outlook on the Nigerian economy, and food and drink sector over our forecast period, despite some of the obstacles in the near term. We are forecasting that the Nigerian economy will expand by 7.0% in 2014, up from an estimated 6.7% in 2013, owing to continued strong expansion in non-oil sectors. The positive impact of agriculture means that this important sector should contribute strongly to private consumption growth.
Similarly to much of the continent, Nigeria is experiencing a growing middle class, accompanied by economic growth. The increasing spending power of this middle class is being targeted by multinationals who are continuing in invest in the country's food and drink sector.
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The long-term outlook remains very bright. We are forecasting average annual real GDP growth of 7.1% over the next 10 years, and expect the Nigerian government to prioritise investment in vital infrastructure over our forecast period and beyond, which will greatly benefit the food and drinks sector, as well as the grocery retail sector.
Headline Industry Forecasts
- Per capita food consumption (local currency) 2014 = +5.91%; forecast compound annual growth rate (CAGR) 2014 to 2018 = +6.05%
- Alcoholic drinks volume sales 2014 = +7.96%; forecast CAGR 2014 to 2018 = +6.77%
- Mass grocery retail sales (local currency) 2014 = +33.50%; forecast CAGR 2014 to 2018 = +30.86%
Key Industry Trends And Developments
SABMiller Expands Presence In Nigeria: In early 2014 SABMiller announced that it will invest US$110mn into Nigeria, continuing its expansion into the African beer market. Nigeria offers fantastic potential, but competition from multinational breweries within the market is intense, and significant risks remain in the country. The US$110mn investment will go into tripling the brewery's annual capacity from 700,000 to 2.1mn hectolitres, and will be operational from the first quarter of 2015.
Walmart Massmart Looks To Nigeria: In early 2014 Walmart-owned Massmart announced it will be launching 10 pilot stores in the commercial capital Lagos over the next two years as it tests the waters, and with fewer than 10 stores in Nigeria currently, compared with more than 90 in Namibia, Shoprite is also likely to significantly scale up its presence. French retail giant Carrefour is also expected to enter the fray through its regional joint venture with CFAO.
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