Have you recently experienced any uptake in Nigeria's business environment?
We see definite signs of recovery in the economy, particularly in the construction industry, which is one of our key sectors. This indicates that there are further investments and infrastructure projects going on in the country. If Nigeria were to follow normal economic indicators, we should see significantly higher growth, but we are not. This is not yet a reason for concern, but being a major driver for our business, we will keep a close watch. We still expect our businesses to progress steadily in the coming months. However, we must watch out for a certain number of indicators. From our perspective, despite the progress made, there are huge gaps in the development of infrastructure, education, and healthcare, which are all necessary for the ultimate uplifting of any country. The oil and gas, upstream, agriculture, and construction segments are all doing relatively well, but it would not take much to disrupt the system if the oil and gas sector were to experience a major shock.
What has led to the current state of the consumer market?
The consumer market is heavily dependent on disposable income. It does not take much for a market such as ours to slow down once the economy comes under pressure. There is pressure on disposable income due to high unemployment rates, coupled with double-digit inflation. Nigeria is one of the few countries in Africa where GDP growth does not necessarily translate into development. That is a major constraint because development means more schools, better healthcare, and improved infrastructure, pulling the entire economy forward in the long run.
Have some suspended projects resumed due to better economic conditions?
Due to the recession, there was a dearth of infrastructural development in 2017, but there have been significant investments by the government in 2018, as many railways, roads, and bridges are currently underway.
How has the ease of doing business in Nigeria improved?
The process of registering a business for a new entrant has been simplified considerably. The situation has undoubtedly improved, but Nigeria remains one of the most complex places to run a business in the world. Looking at it from an investment standpoint, Nigeria is competing against countries like Ethiopia, Tanzania, Kenya, Ghana, or the Ivory Coast, and Nigeria needs to continue to put in efforts to facilitate managing businesses. A major issue is the condition of ports, which are extremely congested, especially due to poor road networks. All these factors affect our ability to create more value in Nigeria. In addition, this does not help us convince our internal investors to do more business in Nigeria, and I am certain it is the same for other multinational companies.
Do you import any raw materials?
We only import the raw materials that cannot be sourced locally. The challenge is, due to the sophisticated level of the technology required to produce these inputs and the absence of a minimum critical mass for technology-driven manufacturing, we have yet to find local substitutes for them. We will keep working on developing locally available substitutes, as we know that is the best way to create the value here in Nigeria.
In 2017, you had plans to increase the number of BASF global businesses entering Nigeria. How has that progressed?
We have doubled what we had in 2017. So far, in 2018, six more business entered the market, two of which were completely unexpected for us. This is a clear indication that some of our internal investors still see potential in Nigeria. Sustainability is fast becoming a major topic for us in Nigeria. At present, we have opportunities for circular economy projects and new business models. We will not necessarily do this all by ourselves; we see ourselves as enablers for several small and large businesses, particularly social entrepreneurs.