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African economies need to be based mainly on domestic consumption. More credit for small businesses, house holds etc is the best way to boost the economy, private sector etc for decades to come..

Nigeria’s consumer market worth $400 billion yearly
2014-05-28 1

Lagos - Nigeria’s consumer market is worth more than $400 billion according to a new report released on Tuesday by the McKinsey Global Institute (MGI)

In the report entitled, “Nigeria’s renewal: Delivering Inclusive Growth in Africa’s Largest Economy’’, the MGI estimated that the value of Nigeria’s consumer market could reach $1.4 trillion by 2030 with food and non-food consumer goods accounting for $1 trillion of the total.

It stated that one of the most important under-appreciated changes in Nigeria was the growing size and strength of its consuming class.

“While the middle income is $680 per year and 43 percent of the population lives below the poverty line, the number of households in the consuming class is growing rapidly,” it said.

“In 2013, an estimated eight million households had income of more than $7,500 per year, the threshold which MGI considers as `emerging consumers’.

“With sufficient income to meet all basic necessities and have money to start buying more and better food as well as health and education services”.

It stated that the labour productivity in the country had grown by 3.6 percent per year since 2010 and had contributed to the greatest share of its Gross Domestic Product (GDP).

The report, however, stated that in spite the improvement in labour productivity, Nigeria was still far behind other major developing economies.

“At less than $9,500 per worker per year, Nigerian output is 58 percent less than the average of seven large developing economies.

“Nigeria also has a low ratio of employment to population of 31 percent compared with 52 percent in Brazil, 46 percent in Indonesia and 48 percent in Russia.

“Productivity is also being held back by poor infrastructure, which increases the cost of doing business in the country,’’ it said.

The report said that the oil and gas sector had many opportunities to improve productivity, adding however, that the large share of the economy that existed outside oil and gas was where the productivity gap to other countries emerged.

It explained that the recent rebasing exercise had demonstrated that the natural resources sector was a smaller share of the country’s economy.

The report further said that the rebasing had cleared the misconception by people outside Nigeria that believed the oil sector was the engine of growth in the Nigerian economy as it is with several Middle Eastern economies.


http://m.news24.com/nigeria/Business/News/Nigerias-consumer-market-worth-400-billion-yearly-20140528
 

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It seems that Nigeria is the only African oil country that is slowely developing an economy based on consumer spending and less on oil.
 

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^^Exactly, what are they buying? And if consumer spending is 400-bilion, that means it makes up 90% of the $509-billion economy, making Nigeria the most consumerist nation in the world, even higher than the US. These numbers don't add up I'm afraid...
 

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You forget one important thing, the Algerian state subsidizes the sale of new cars and other things..
The same story is in Libya were more people own a car then in other African countries, because the state subsidized many new cars etc.
Err.. thats no excuse. Even in Morocco, where cars are actually heavily taxed, the car sales are higher than Nigeria. While Nigeria has 5 times the population of Morocco.
 

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Err.. thats no excuse. Even in Morocco, where cars are actually heavily taxed, the car sales are higher than Nigeria. While Nigeria has 5 times the population of Morocco.
Libya and Algeria subsidize new cars, Moroccan banks give credit to people who want to buy a new car. This is only since 14 years that banks are offering more credit, mortgages etc
Nigerian banks are not in that proces yet. Compared to Moroccan, Tunisian, SA banks not many people in Nigeria have acces to credit to buy a home, car etc.
If that changes, you will a see a car sale boom, house sale boom etc


Renault to open car credit bank in Morocco
http://magharebia.com/en_GB/articles/awi/newsbriefs/general/2007/10/10/newsbrief-05
 

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You cant increase domestic consumption if people arent earning. China's move to domestic consumption is due to the rising salaries and huge amount of jobs that have been created.

So again it comes to the same thing- build a strong private sector which will pay ist employees a regular wage, growth the middle class, and th rest will follow
 

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Mutu ya Chuma.
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You cant increase domestic consumption if people arent earning. China's move to domestic consumption is due to the rising salaries and huge amount of jobs that have been created.

So again it comes to the same thing- build a strong private sector which will pay ist employees a regular wage, growth the middle class, and th rest will follow
That isn't the only problem...The consumed goods in Nigeria are also imported, almost all of them.

SA on the other hand is a manufacturer and an exporter.


If Nigeria started manufacturing most of what they consume (by local and foreign intestors). Consumption will sky rocket, obviously. products will be cheap, many people will get credit from banks to purchase more since they will have lots of people working in the manufacturing industries.


It's no magic why SA and Morocco with small population consume more than Nigeria.
 

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Mutu ya Chuma.
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It seems that Nigeria is the only African oil country that is slowely developing an economy based on consumer spending and less on oil.
Most of the goods are imports. That is no healthy enough.

If they manufacture most of these consumer goods, they will more than triple the current level.

As we all know, Nigeria has chronic electrcity issues that keeps manufacturing investors unInterested......There are also still lots of logistical issues.

You should never neglect electricity and logitics. never.
 

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Most of the goods are imports. That is no healthy enough.

If they manufacture most of these consumer goods, they will more than triple the current level.

As we all know, Nigeria has chronic electrcity issues that keeps manufacturing investors unInterested......There are also still lots of logistical issues.

You should never neglect electricity and logitics. never.
That's false. Most of the goods aren't imported. They're measuring things like food consumption as well and NG has a 120bn$ agric economy. They also process food and have Manufacturing economy also as big as South Africa. Today it's likely bigger. You're mistaken. NG consumed more than SA and morroco combined

SA mainly exports raw mining commodities. That's why it's economy is hit by the strikes. It's structure more like NG than unlike it
 

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^^Exactly, what are they buying? And if consumer spending is 400-bilion, that means it makes up 90% of the $509-billion economy, making Nigeria the most consumerist nation in the world, even higher than the US. These numbers don't add up I'm afraid...
It's not 90% but closer to 80. Egypt has a 76% consumer economy so it's not unusual. Besides I don't know if they're using nominal or ppp to measure it. NG ppp economy is over a trillion.
 
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