The Embattled Nigerian Consumer is no King
Gordon Selfridge, the founder of the iconic Selfridges department store on Oxford Street, London once said, “The customer is always right”. The embattled Nigerian consumer has found the contrary to be the case. He is currently challenged by a rash of measures, which have shredded his wallet, whilst the prospects of continued employment may also be in doubt.
The silver lining is that in the short-term there are problems but the medium-term looks promising if the current reforms encourage investors to bring out their cheque books.
The economic prognosis of light at the end of the tunnel is predicated on the strong correlation between investment and higher total factor productivity, currently (-2.8%). It is believed that GDP will increase from -3.3% to 1.8% and total factor productivity will improve from -2.8% to 0.6%. This scenario will bode well for the Nigerian economy and the consumers.
As the Naira strengthens…
The naira has been relatively stable in the forex market. The Non-deliverable forward rate for 360 days (N451/$) is now mirroring the parallel market. There is now more optimism that the rationing of forex will discontinue and the speculative premium on the Naira will reduce making the rate of exchange in the parallel market to appreciate.
In the slides, Bismarck Rewane and the FDC Think Tank discuss these issues and the impact on your business strategy and the positioning of your company in these uncertain times.
Enjoy your read.
Download the full LBS Executive Breakfast Session – October 2020 report here