Nigeria’s retail and wholesale trade industry has the potential to grow by 7.1% per year, and by 2030 could be the largest contributor to the country’s GDP, according to recent report by McKinsey Global Institute. Sales of packaged food and beverages are expected to grow by 6.8% a year, contributing around 85% of the growth in consumer goods.

Nigeria’s major cities can be looked at as broader clusters. Image: MGI

The report, Nigeria’s renewal: Delivering inclusive growth in Africa’s largest economy, estimates that demand for consumer goods could more than triple by 2030. The largest economy in Africa is seeing a rising consumer class, creating a notable opportunity for manufacturers and retailers of fast-moving consumer goods such as food, beverages and personal and health products. Currently consumption is estimated at US$388bn a year but is expected to rise to $1.4tr in 2030, with 35m households earning over $7,500 a year.

“Based on data from other economies on how consumption changes with rising incomes, we see demand in Nigeria poised to accelerate in such categories as fruit juices,” illustrates the report.

“Capturing emerging consumer demand, however, will require smart choices about where, when, and how to enter Nigerian markets. It will also require specific capabilities that international companies especially may need to develop.”

One strategy for consumer facing companies in Nigeria is to adopt a city and regional approach, as opposed to a nationwide approach where distinct differences in culture, demographics and wealth exist. While Lagos, with an estimate of 15m residents, may be the go-to city for companies targeting consumers, McKinsey suggests three regional clusters of cities that together produce sizable populations to rival Lagos.

“Companies playing in all three of these clusters could target 20% more households earning above $7,500 than in Lagos,” notes the research.

A six city cluster around the Niger Delta in the southeast

Port Harcourt, Warri, Benin City, Aba, Enugu and Onitsha make up the six city southeast cluster. Its proximity to oil wells has led the region to be a hub of activity for oil companies and foreign investment.

According to the report, total GDP in this cluster alone is $63bn, which is a close rival to Lagos’s GDP of $68bn, despite having far fewer households. Both Port Harcourt and Aba have considerably higher consumption per capita than Lagos. Port Harcourt, followed by Benin City, Onitsha and Aba have the largest populations within the cluster

Companies looking to target the luxury segment might want to especially consider Port Harcourt, the capital of Rivers State, which has the highest consumption per capita in the country ($6,843 in 2013). The city has one of the largest consuming middle classes in Nigeria with household incomes between $20,000 and $70,000 a year. It has access to two of the country’s busier ports and is home to the Port Harcourt Airport.

Ibadan, Ogbomosho and Ilorin, just north of Lagos

These three cities are within close proximity to Lagos. Ibadan (the capital of Oyo State) is the second largest city after Lagos, and has a fast-growing consumer market. While Lagos has over four times the number of households as Ibadan, consumption per capita of Ibadan in 2013 was $4,562, rivalling Lagos’s $4,710. Ibadan also has a large emerging consumer class with annual household incomes of between $7,500 and $20,000, and one of the larger consuming middle classes in the country with incomes between $20,000 and $70,000 a year.

According to a recent African Development Bank (AfDB) report, Tracking Africa’s Progress in Figures, Ibadan is one of the top 10 fastest growing cities in Africa.

Northern corridor cluster of Kano, Zaria and Kaduna

This cluster holds potential for consumer businesses looking for sizable populations in northern Nigeria. Kano is the fourth largest city in Nigeria, and Kaduna the seventh biggest.

This year, South African retailer Shoprite launched its first outlet in Kano, while Massmart opened a Game store just before June. Despite the potential security risk posed by Islamic militants in the region, Massmart’s Africa director Mark Turner said at the Reuters Africa Summit in April: “I always want to be bold enough to say, you can’t be in Nigeria without being in Kano.”

That's a bloody lie, even the two of them combine no reach gidi own...

Dharniel:
That's a bloody lie, even the two of them combine no reach gidi own...

Can you bring facts to buttress your points

Dharniel:
That's a bloody lie, even the two of them combine no reach gidi own...

See them

Lagos GDP is just $68bn while the gdp of south east cluster is hovering above $63bn leaving a difference of $5b which can be filled up with a deep sea port in Akwa ibom.
The present economic climate doesn't favor businesses in Aba and Onitsha taking their goods to lagos for export or importing through lagos.

Sole proprietorship remain the bedrock of any country economy to growth even in US, UK and China's of this world.

kettykin:
Lagos GDP is just $68bn while the gdp of south east cluster is hovering above $63bn leaving a difference of $5b which can be filled up with a deep sea port in Akwa ibom.
The present economic climate doesn't favor businesses in Aba and Onitsha taking their goods to lagos for export or importing through lagos.

Who else thinks this is true

Retail and wholesale trade to become the highest contributor to GDP by 2030. Guess which people dominate that sector Nationwide

MXrep:
Retail and wholesale trade to become the highest contributor to GDP by 2030. Guess which one people dominate that sector Nationwide

Retail trade is controlled by igbos , the recent closing of markets in Lagos is another pointer of a sinister mischief to disrupt the igbo controlled Retail business.
But more surprising is this piece of info from Mc kinsey which does not tally one bit with what NBS has been dishing out for years

kettykings:


Retail trade is controlled by igbos , the recent closing of markets in Lagos is another pointer of a sinister mischief to disrupt the igbo controlled Retail business.
But more surprising is this piece of info from Mc kinsey which does not tally one bit with what NBS has been dishing out for years

Mckinsey also projected Onitsha urban cornubation to rival Lagos by 2040, both above 10m

Demographia has rated Onitsha urban sprawl as the largest urban space in Nigeria by landmass and second largest after Lagos by population

FACTs....

kettykings:


Who else thinks this is true

Fire Down!!

MXrep:
Demographia has rated Onitsha urban sprawl as the largest urban space in Nigeria by landmass and second largest after Lagos by population

While trade and commerce is dominated by IGBOs, the children of Generational hate and foolishness, have been spoon fed owo mi da Nonsense...from birth.

BIAFRANs breed Enterpreneurs FACTs. From the 2by2 shop, of INNOSON that made GTB to beg for out of Court settlement .

Yaribaaaaa breed Agberos, touts and cultist. They also breed identity theft merchants and other criminals that are certified document forgers. If an independent audit of academic records are taken in that country. Yaribaaa will come second behind the North in falsified Documents. Fake documents are rampant in their region followed by Human parts markets.

The North breeds indolent youth that are Boko Haram candidates or loyalist. It's only the Hausa that are predominantly farmers and also Enterpreneurs in their own way


Please endeavor to propagate the Notion of leaving that cesspit. It's a worthless gathering of different ideologies.

Cheers mate!

kettykings:


Retail trade is controlled by igbos , the recent closing of markets in Lagos is another pointer of a sinister mischief to disrupt the igbo controlled Retail business.
But more surprising is this piece of info from Mc kinsey which does not tally one bit with what NBS has been dishing out for years

kettykings:


Retail trade is controlled by igbos , the recent closing of markets in Lagos is another pointer of a sinister mischief to disrupt the igbo controlled Retail business.
But more surprising is this piece of info from Mc kinsey which does not tally one bit with what NBS has been dishing out for years

Believe Nigeria-made statistics to your own peril.
Do you see how the presidential elections is being carefully and shamelessly whitewashed?
In Nigeria, white is made black, and black made white.
Satan is jealous of Nigeria's ability to spin evil into accepted norm. lol
The way I judge Nigeria's economy is to simply judge spending power by INDIVIDUALS/EACH PERSON in Nigeria.
On average, is there any group in Nigeria that can spend money more than Igbo? Methinks NONE.
Igbo wealth is deep and very well distributed -WORLDWIDE.
Anyi bu orimili ata ata.
Igbo economy is worldwide, not local.
If they close market in Lagos, we build better ones in the east with money from ALL OVER THE WORLD.
That is what makes Igbo indomitable.

1. Lagos axis (Lagos and Ogun states)
2. Onitsha axis (Anambra and Imo states)
Onitsha axis is the largest urban space by landmass, larger than Lagos/Ogun axis. Na to attract more population there now