Nigerians are so overwhelmed by the inadequacies of Nigeria; we easily ignore its strengths. I am not talking here about Nigeria’s potentials; I am talking about Nigeria’s current actual status in the world economy. I am talking about Nigeria as a country with the biggest consumer market in Africa. Just think about it: the entire economy of Kenya is only equal in size to that of Lagos State in Nigeria.
Says Nigeria’s foremost industrialist, Aliko Dangote: “Nigeria is the best kept secret in the world. Anybody who doesn’t invest in Nigeria only has himself to blame, going forward, if he misses out. I don’t really know of any place where you can make as much money as you make in Nigeria.”
South African invasion: I don’t know to what extent rank-and-file Nigerians are aware of this, but South Africa is already making a big onslaught on this lucrative Nigerian market. If we don’t buck up and take charge, we might wake up sometime in the not-too-distant future and discover that, out of indolence; lack of imagination and dearth of enterprise, we have surrendered the commanding heights of our economy to our junior South African brothers. I call them our junior brothers because we paid their “school-fees” in the form of assisting them in their liberation struggle against the apartheid system.
In a slow but steady manner, South Africans are beginning to entrench themselves into key facets of the Nigerian economy. From aviation to banking to construction to entertainment to revenue collection to telecoms; South African companies are staking a very forceful claim to Nigeria. With MTN, they now reign like a colossus over the tele-communications industry. With Multichoice DSTV, they are now king of pay-TV. Tiger Brands has signaled its determination to dominate Nigeria’s food business by taking over majority shares in UAC Foods and Dangote Flourmills; two of the country’s leading food manufacturing companies.
Take a look at the following firms which are quickly becoming Nigerian brand favourites; you might not be aware that they are all South African. Chicken Republic; Critical Rescue; Defresh Products; Entech and Broll; Eskom; Global Outdoor Semces; Grinaker-LTA Construction; Massmart (Game); Oracle Airtime; Mr. Price; Nandos; Protea Hotels; SAB Miller; Sasol; Shoprite, South African Airways; Stanbic IBTC; Standard Chartered; St. Elmos; Truworths; Umgeni Water and Woolworths.
At the moment, Nigerian companies don’t seem to be able to compete with most of these companies, for the simple reason that we don’t have in Nigeria a culture of good planning, sound management and efficient services. However, these are the major selling-points of the South African brands, making them increasingly the preferred choice of Nigerians. Consider this: in 1994, South African companies made a paltry $11 million in Nigeria. By 2005, they made a whopping $11 billion.
On the flip side, the Nigerian economic presence in South Africa is insignificant. Nigerian companies cannot adequately serve the huge Nigerian market, therefore most have little incentive or capacity to explore the South African market. Those that make forays abroad concentrate essentially on the ECOWAS sub-region. Apart from companies like Dangote Group, Financial Standard, First Bank, News Media, Philips Consulting and ThisDay Newspapers, Nigerian companies are few and far between in South Africa.
MTN supremacy:
There is really no good reason why a South African company like MTN should dominate the mobile telecom market in Nigeria, if it were not for the fact that Nigerian policy-makers don’t seem to appreciate that, wherever possible, Nigerians should be preferred over foreigners in Nigeria. On the contrary, foreigners often get more special treatment. You may not have realised this, but a foreigner is more likely to get a loan from a Nigerian bank before a Nigerian.
With regard to the mobile phone system, Nigeria had local people, like Mike Adenuga and Hakeem Belo-Osagie, who were not only interested but were also sufficiently enterprising and qualified to participate in the project. However, some classical Nigerian blunders were made. The scheme was made open to the highest bidder, a requirement which worked in favour of foreigners with access to larger capital. By the time the bid reached $285 million, Belo-Osagie was constrained to drop out. While Adenuga stayed in, there was some hiatus with his payment transfer and he was disqualified.
The road was then cleared for MTN, a South African firm, and ECONET wireless, a Zimbabwean firm, to pioneer the mobile-phone system in Nigeria. Those two companies quickly ripped-off Nigerians by introducing an extortionate service of N50 per minute. By the time we woke up to what had happened and finally allowed Adenuga back in with his Glocacom system to break up their market monopoly and subvert their high pricing, MTN had already cleaned up the market. Belo-Osagie too has since come back in, partnering with the giant Etisalat, but there is no question that, short of a miracle, it will be impossible to overcome MTN’s head-start.
Thanks largely to that advantage; South Africa’s MTN now controls some 52% of Nigeria’s mobile telecoms market. According to statistics provided by the Nigerian Communications Commission (NCC), MTN stands head-and-shoulder above the rest with as many as 55 million subscribers; Globacom comes a distant second with 25 million; Airtel comes third with 21 million; and Etisalat is fourth with 15 million.
I have no problem with MTN or other foreign firms being in Nigeria. I personally have an MTN line, and I can say without being liable to accusations of bias that their services are lousy. Nevertheless, my position is that non-Nigerians should not be given a head-start vis-à-vis Nigerians in the Nigerian economy, especially in those areas where Nigerians are more than able to make a useful contribution. If Nigerians end up being discriminated against in Nigeria, it means we are effectively orphans in our own country.
With currently now over 115 million mobile-phone users in Nigeria, a figure more than double the entire population of South Africa which is 52 million, Nigeria has become MTN’s biggest cash cow. The company now makes over $2.5 billion in profits annually from Nigeria alone. That is virtually equal to the total annual budget of Lagos State, by far economically the largest state in Nigeria. This is not an argument against foreign investment in Nigeria, but it means money that could have been earned in Nigeria and re-invested in Nigeria gets repatriated from Nigeria. We need some people somewhere among our policy-makers to start thinking for Nigeria.
Multichoice monopoly
Another South African flagship in the Nigerian economy is Multichoice DSTV, which accounts for over 90% of the viewers of satellite TV. Multichoice had the distinction of being the pioneer Pay-TV operator in Sub-Saharan Africa. This early-bird advantage enabled it to acquire a number of exclusive content agreements which makes it virtually impossible for others to compete on a level-playing ground with it. The critical one in this regard is the right to the English Premier League (EPL), the most popular TV programme on the continent.
This has ensured that Multichoice has been more than a competitor for the local Nigerian Television Authority (NTA). Supplementing its different Super-Sports channels with several Nollywood (Africa.Magic) and Hollywood (Movie Magic) channels, as well as local and foreign music stations and more, Multichoice is increasingly the preferred choice of Nigerian television viewers. The near-monopoly of Multichoice has enabled it to rip off its subscribers by making Nigerians pay for films that they don’t even watch. By having fixed charges instead of pay-as-you-go, Multichoice has been laughing all the way to the bank.
The government attempted to break the Multichoice monopoly by insisting that the right to show the EPL in Nigeria could not be bundled with the right to show it in the rest of Africa. Given the relatively large size of the Nigerian market, a separate bid had to be made for Nigeria alone. This enabled a local rival, HITV, to bid for the right and receive it for three years.
However, HITV turned out to be one big disaster. Its Nigerian CEO, Toyin Subair, got carried away by his vantage position in having exclusive rights to the EPL. He went on a spending spree buying luxury cars, jet-setting all over the world and throwing lavish parties. Within three years, HITV was bankrupt and Multichoice reclaimed its exclusive rights to the lucrative EPL.
No retreat, no surrender
This is not a call to discrimination against South African firms; our South African brothers are good for Nigeria. It took South African Shoprite Supermarket for us to realise that there is a market for modern retail outlets in Nigeria. Shoprite’s overnight success has prompted other international retail stores to join the fray, such as Spar, Massmart and Woolworths. Shoprite CEO, Whitey Basson, said he saw the scope for 700 Shoprite stores in Nigeria alone, up from the current two, arguing that even if 60 percent of Nigerians live in poverty, the other 40 percent would still outnumber South Africans.
Where then are the Nigerian entrepreneurs? It appears they are either asleep or looking for oil. This is an attempt to embarrass us by challenging Nigerians to rise to the South African challenge. Nigerians need to realise that there is already underway a South African play for Nigeria, and this challenge is not simply at the level of the Super Eagles and the Bafana Bafana where we have tended to reign supreme. This is at the more cogent level of economic supremacy. It is at the level of determining the preeminent and representative black African country in the world today.
The South Africans are here in Nigeria, and they are here with a plan. They are here to take over the Nigerian economy. At the moment, we seem to have been lulled into a widespread and deepening surrender. This is a “call to arms.” We must neither ban South Africans nor impede them. But we must match them and best them. We must also recognise that, wherever possible and necessary, Nigerian firms must be given priority over foreigners. South Africans should not receive in Nigeria the concessions that Nigerians cannot receive in South Africa.
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this is the most thought provoking write up i have read in recent times. i hope our corrupt politicians will use the ill gotten wealth and invest in Nigeria instead of using it to cause ethnic conflicts.
ReplyDeleteNigerians need to know that our home is our home, with our policies of fairness and openess to all, we can make Nigeria a far better place that people arround the world will beg for visa to visit, but due to lack of foresight, wickedness, selfish inetrest and jealousy, we are not attaining our potential as a country blessed with everything. It is good for foreing investors to come and not be chased away, but Nigerian mases interest need be at the altimost. I beleive many goverment officials have share in this so called MTN, that is why they allow them to be riping Nigerians off, such people need to be dealt with without mercy, and it will soon come to that very soon as they have made Nigeria unliveable for the mases by stealing, incresing pump price, Electricity tariif, plate number tariff, driving licence tariif, international passport tariff etc. Soon, very soon, they will all lose what they have aquired falsefully, even when they die and hand them to their children, they will still loose it and face their purnishment with Almighty God. Some will receive their purnishment on earth as it pleases God He will george them all. Also, any one who follow bad trend in government to purnish Nigerians by creating more hardship to the people will not gain all he laboured for.
ReplyDeleteFemi i am proud of you! let our corrupt politicians invest in this country rather than exporting jobs by keeping these monies in another economy.
ReplyDeleteLord open the eyes of our corrupt leaders!
This is very true and Sad fact. I don't even know if Nigeria will ever be better because the problems are deep rooted in our mentality. A lot needs to be done by policy makers and even average individuals otherwise, we'll wake up one day and the only good things we have will already belong to foreigners...
ReplyDeleteWe are inferior complexity prone, even if a qualified Nigerian apply for a contracts, he will be rejected but let one "foreign" apple hawker do the same,we all know the result, same apply in the banking sector.
ReplyDeleteIt will surely get much worse with the breed of politicians we have that have no soul and are available to any foreigner because of their corruption
ReplyDeleteThere are many problems with Nigerians especially when it comes to investments ,(1) Nigerians lack patience and sometimes honesty . Most of Nigerian investors do not want to hear long projection of profit maximization in their investments therefore they want instant success and being a head of the pioneers in the same business . Many Nigerian workers will always make more money than their employers, this act is found both in public and private establishments for example :that MD or DG that is announcing 2 billion naira profit for their company has not told you how much himself and board of directors made for themselves . Banks will continue to give priorities to foreign investors because most of the loans granted to Nigerians are not paid back to the banks . Many of the debtors used their`s to buy cars and houses for themselves and their girl friends . Mediocrity is another problem, people are sent to school and on getting there they prefer to engage themselves in secret cults and other criminal activities instead of being focused to their studies and eventually many of them will find themselves in these establishment and to be frank such persons may have little or nothing to contribute where they are working .
ReplyDeleteI hope our policy makers will have a rethink over the seriousness of this issues as raised by the writer; and then take prolific steps to handle the situation.
ReplyDeleteU r on point broda!God help Nigeria,our mentality and our attitude.dis is a form of economic neo-colonism,we r selling our birth-right to d lebanese,south people etc.our leaders must b careful o!
ReplyDeleteThis is a very thought -provoking piece. We are shouting that South Africans are maltreating Nigerians in South Africa but already most South African firms are already maltreating Nigeria here in Nigeria. Take for example: MTN keep deducting money from my GSM credit in the name of Backup but as I am writing this I lost may phone and did welcome back but almost one week now I have not gotten my backed up numbers. I went to MTN only to be told that the organisation is having problem with the system.Now they did not have problem in the system when making the deductions and beside I know I have missed important thing simply because I have not gotten my backed up number. Is this not sad.Is it fair? Could they have done this in USA, Canada or Britain. The Firm would have been sued for damages. In fact, most foreign organisations in Nigeria do not respect Nigerian and South African firms operate like there is no law guiding them. It is a pity.
ReplyDeleteGod bless u Femi, u seem to clearly distinguish urself by the day from the other rabbit talkin Femi who has nothing useful but a Cambridge Certificate paper to offer.
ReplyDeleteFemi , i follow your writeup and for the first time after a long time ur writings appealed to me. Good work i must say.
ReplyDeleteThis so called Lebanese and indians are no body in their countries, I have worked at international level with them, outside our shore and at high level, they are no body, not better than Nigerians even, but they come to Nigeria and our "mumu leaders" worship this things, give them priviledge over Nigerians.....it's a shame, while we can not even dear that in their countries, even in a foreign country, Indians will not want to allow Nigerians because of what they hear about Nigeria situation and leaders, feeling at least they are better than them afterall. We need to overhaul the whole of the country and the people.
ReplyDeleteThis is the kind of revolution we are looking for. Not carrying arms.
ReplyDeleteBrilliant! !!!
ReplyDeleteThe truth is that , Nigerians are not honest. I doubt if we can get 50 People who are honest in this country. Both leaders and followers alike. That's the bitter pill.
ReplyDeleteThe truth is that Nigerians are not honest. We can hardly find 50 honest people in this country. Both leaders and followers alike.
ReplyDeleteThe truth is that , Nigerians are not honest. I doubt if we can get 50 People who are honest in this country. Both leaders and followers alike. That's the bitter pill.
ReplyDeleteThis will continue to happen, why? We are the greatest enemy of ourselves. Majority of our leaders directly or indirectly have shares in those Multichoice and MTN but have forgotten the fact that these South African companies are feeding them with crumbs that fell from their tables. Some of our leaders has been lured to accepting enjoying the services free of charge as long as they can prevent any other existing companies from rising and competing with them.
ReplyDeleteI remembered I made a case out of DSTV dominance in Nigeria. They milk the Nigerians too much and they are getting away with it. Compared to other developed Nations of the World, such we never happen. They create rooms for competitions which at the end of the day, the poor people will benefit from it. Even in Europe, Sky satellite is the biggest but very affordable and they offer Broadband satellite to their subscribers if you want. To verify this claim go to their website http://www.sky.com/products/ and to view more of their products, just place your Mouse on SKY PRODUCTS and you will see their services.
Nigeria launched a satellite Nigcomsat1r to be specific with 15years life span since 2011. £ years wasted out of 15years but yet to start commercial business while others who launched their own satellites had since commenced operation just a month or 2 months after launching. This so called satellite is able to bring Broad band Internet to Nigerians at lowest rate and everyone will be able to afford it to slash down completely the internet subscription rate/plan offered by Telecommunication companies . This can also bring DTH programs to the door of Nigerian. Which NTA can exploit to challenge DSTV and force them to slash their heavy subscription. It is a very big shame that what naturally can earn Nigeria Government Billions of Naira as income has been left to WASTE. I just pray that CONSAT satellite will live up to that level to challenge DSTV and GLO & Etisalat shall live up to expectation to challenge MTN etc.