In an exclusive interview on Bloomberg TV, South African billionaire Christo Wiese voiced optimism about Nigeria's economic future, countering the recent trend of global corporations exiting the country. Wiese, the former chairman of Shoprite Holdings Ltd., Africa's largest grocer, described the recent exodus as a temporary setback, emphasizing the significance of Nigeria's large and burgeoning population that businesses cannot afford to ignore.
"How do you ignore an economy like this?" queried Wiese, referencing Shoprite's departure from Nigeria in 2021. The billionaire predicted that major players would inevitably return to the Nigerian market.
Wiese highlighted the cautious approach of foreign investors, including South Africans, attributing it to a wait-and-see stance for the economy to develop further and for governments to adopt favorable policies. He acknowledged the initial enthusiasm surrounding global firms entering Nigeria but noted the challenges faced due to economic fluctuations.
The recent exits of Procter & Gamble Co., GSK Plc, Bayer AG, and Sanofi SA have raised concerns about the ease of doing business in Nigeria. Factors contributing to this trend include a scarcity of dollars for earnings repatriation, currency devaluation, unreliable electricity supply, and congestion at ports.
Despite Nigeria's vast resources, including oil reserves and fertile land, policy missteps, corruption, and an over-reliance on oil have hindered economic diversification since the restoration of democracy in 1999. The expansion of the middle class fell short of expectations.
The implications of corporate exits on Nigeria's economy are significant, exacerbating pressure on the naira, which has depreciated by 86% over the last eight years. With $187 million in investment leaving the country in 2022, compared to an inflow of almost $9 billion in 2011, Nigeria faces increased challenges in its ongoing efforts to diversify and stabilize its economy. As global corporations navigate uncertainties, Wiese's positive outlook provides a contrasting perspective on Nigeria's long-term business prospects.
