Insecurity has perhaps become the most topical issue in the country today, with government, the citizens, and investors worried. Only recently, British soap-maker, PZ Cussons, warned that it was likely to report disappointing full year profits, pointing to political upheaval in Nigeria, challenging trading conditions in Australia,
and high raw materials costs. PZ Cussons also said it was monitoring social and economic tensions in Nigeria closely, after gun and bomb attacks by Islamist insurgents in the northern city of Kano killed at least 186 people.
The impact of the insecurity in Nigeria on PZ Cussons is an indication that other Fast-Moving Consumer Goods (FMCGs) may be in for a bigger challenge as their bottom lines may be adversely affected, leading to job losses if the situation does not change.
The Boko Haram crisis, which is the major cause of insecurity in the country, has taken the lives of many business people while displacing others and ruining businesses. At the Mile 12 Market in Lagos, drop-off point for food items that enter homes in cosmopolitan Lagos and some parts of Southwest Nigeria, supply of foodstuff like tomatoes, onions, pepper, and yam, of which Nigeria is world number one producer, has dropped tremendously. These are signals that Nigerians need to brace up for an impending food crisis and accompanying higher prices in the coming months as food supplies from the North, which account for over 70 percent of food consumed nationwide, are dwindling by the day due to the Boko Haram crisis. The resumed bombing by Niger Delta militants is not helping matters either.
The impact of the sectarian violence and ripple effects of economic crises in Europe have helped to depress the Nigerian Capital Market and investors’ confidence. These events are capable of reversing the gains the economy has recorded, including current growth rate of 7.4 percent. Just recently, there were reports of appreciable growth in general Fast Moving Consumer Goods (FMCG) sector from $884 million in 2008 to $1billion in 2011. Growth has been so robust that renowned multinationals are not only showing interest daily in Nigeria but are expanding their businesses. Coca-Cola Hellenic in December 2010 announced a $300 million investment in Nigerian Bottling Company, its local unit. Even PZ Cussons, in spite of its recent concerns, plans to expand its food business in Nigeria with the construction of $27million palm oil refinery in the country. Nestle, the world’s biggest food group, and Guinness have plans to increase their capacity in Nigeria. Heineken NV, the world’s third largest brewer, in January 2011 bought controlling stakes in five breweries in Nigeria, expanding its capacity in Africa’s second largest beer market by nearly a third. Guinness and Heineken’s moves are in response to SABMiller’s entry into the market.
The nation should not allow these successes to be halted by insecurity. The concerns expressed by PZ Cussons is a wake-up call to the government to take drastic steps in addressing the insecurity in the country. There is also an urgent need to make the leadership of the North show deeper concern for the problem at hand and take responsibility. They must reach out to the Boko Haram leadership, who live among them, and find ways of talking them into dropping their guns and bombs. This is important because the economy of the North, and indeed of Nigeria, is under threat and the time to act is now.
We must move fast and find a lasting solution now. A prolongation of the crisis is nothing but doom for the country. We reject this in its entirety.