Multinationals are advised to implement short-term pricing, marketing, and product portfolio measures to overcome worsening challenges in Nigeria
Protests that took place between August 1 and 10 under the slogan #EndBadGovernance, turned violent in a number of states such as Kaduna and Kano. Daily protests are unlikely to continue in the short-term, however frequent ad-hoc protests are more likely to occur now that protestors have gained some momentum. Future protests will aggravate, but not fundamentally worsen, the country’s already downbeat growth outlook into 2025. The economy is struggling with record-high interest rates, strained public finances, weak oil production, and currency volatility. Nonetheless, growth will be sustained by select industries such as finance and ICT which remain resilient drivers of growth.
Business Implications:
Protests will compound difficulties multinationals face in Nigeria including changing customer behavior (including trading down), currency volatility, and FOREX shortages. Looking ahead, firms should prepare for sudden but short-lived loss of market access until at least early 2025 driven by ad-hoc protests. Specifically, multinationals should anticipate demand slumping in regions where protests turn violent and curfews are imposed. Firms should continue to implement short-term measures that can help them mitigate the worsening operational and macroeconomic conditions in Nigeria. This includes increasing the frequency of pricing reviews, scheduling more frequent conversations with their local partners to align on the latest developments, and adapting their product portfolios and marketing campaigns to the fast-changing demand outlook. Where possible, prioritizing business development campaigns on high-growth industries such as ICT and financial services can help firms boost commercial performance.
What has triggered the protests?
Protesters have been motivated by deteriorating socioeconomic conditions, specifically among low and middle income households. Food inflation exceeded 40% YOY June, with the prices of certain foodstuffs increasing by more than 100% YOY (for example, rice, beef, chicken, and plantain). This is further aggravated by elevated transportation costs that were raised in mid-2023 and a reduction in subsidies on energy inputs such as diesel. This had prompted protestors in Nigeria, who seem to have been inspired by the anti-government movement in Kenya, to announce 10 days of protests to express their frustration with the current administration’s handling of the economy.
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