Nigeria’s economic growth is expected to slow down this year to 4.8% amidst falling oil prices globally. Despite this cut in growth forecast, Unilever is poised to raise its stake in its Nigerian unit to as much as 75%. The company intends to buy nearly 944.5 million shares of Unilever Nigeria. This deal, if accepted by the Nigerian Stock Exchange and the Nigerian Securities and Exchange Commission, would be valued at about 200 million Euros ($218 million).
Bruno Witvoet, Unilever Africa’s Executive Vice President, said in a statement on the company website, that the move would demonstrate the company’s commitment to Unilever Nigeria’s business as well as confidence in the long-term growth prospects of the company and consumer goods sector in Nigeria.
Read more on Unilever’s expansion in Nigeria http://www.bloomberg.com/news/articles/2015-03-25/unilever-plans-to-raise-stake-in-nigerian-unit-on-growth-outlook
Businesses operating in Sub Saharan Africa cannot escape the impact of politics on the dynamic African consumer market. Chief Executives and Managing Directors are often faced with the task of assessing the political and economic outlooks of the countries they operate in in order to make informed, critical decisions impacting their operations. In the case of Nigeria, Unilever’s move is in contrast to Nestlé Nigeria’s planned decrease of their capital expenditure to its lowest level in the last 5 years. With the earlier postponement of the elections from February to March resulting in the devaluation of the Naira to the US dollar, it remains to be seen how the conclusion of a peaceful and democratic presidential election this past March will alter the country’s economic outlook and impact investment and growth decisions for businesses operating in the country.