MNCs should ensure remuneration packages and training opportunities are tailored to local dynamics
MNCs struggling with talent recruitment or retention should tailor their financial and non-financial remuneration packages to local preferences, which will ensure they remain attractive in Nigeria’s competitive labor market (e.g., tailoring benefits to include healthcare and financial assistance with housing or transportation). To ensure local partner capabilities remain strong, MNCs should consider offering regular training sessions and materials for their local teams and channel partners to develop and sustain their technical and marketing capabilities. Firms facing higher salary and training costs may need to identify other areas where they create savings. In highly specialized sectors, such as healthcare, MNCs should track available data on the number of qualified professionals as they develop and review their market assumptions. Companies selling consumer goods should track data and insights related to emigration—by consumer segment where possible—to monitor size and growth trends of their addressable markets; tracking immigration data from key destination countries, such as the UK, US, and Canada, can be useful for this.
Overview
In recent years, surging numbers of working-age Nigerians have left the country to seek better opportunities abroad. Subdued GDP growth, high unemployment, plummeting household purchasing power, chronic power outages, worsening insecurity, persistent salary arrears, and periodic civil unrest are among the plethora of concerns pushing people to “japa”—a Yoruba word meaning “flee.” According to a report by Africa Polling Institute, the number of Nigerians willing to relocate out of Nigeria with their families increased sharply from 32% in 2019 to 73% in 2021. Moreover, in 2022, 34,133 Nigerians were granted work visas for the UK (a major destination for Nigerian emigrants)—a 195.9% YOY increase. In 2021, 932 doctors left the country for the UK; meanwhile, doctors’ numbers in Nigeria slumped from 44,021 in 2018 to 24,600 in 2019 (the most recent data available).
Our View
Nigeria’s challenging economic and social conditions will continue to push its citizens to find opportunities elsewhere through the mid-2020s. This will drive the continued exit of workers and consumers. The exodus of high-skilled workers will make it more difficult for businesses, including MNCs and local partners, to find and retain employees with their desired skill sets, especially for upper-middle management positions. In turn, this will increase costs related to worker recruitment, training, and attrition for MNCs. Firms will also struggle to maintain marketing, sales, and technical capabilities, curtailing their ability to capture new opportunities, as well as undermining brand image. Slumping numbers in sectors like healthcare (particularly given the highly specialized nature of this sector) will limit growth; industries such as finance and tech will also be heavily affected. Moreover, the departure of relatively high-income earners will somewhat constrain demand growth over the next few years, particularly for premium consumer goods. Still, emigration to advanced economies could drive up financial remittances, supporting purchasing power for low- and lower-middle-income consumers well beyond the next two years.
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