Nigeria

Food and Beverages

Executive Summary

SECTOR OVERVIEW IN NIGERIA

 African countries spend more than USD60bn annually importing food for their growing populations, but
the continent has the potential to become a major food exporter.
 Agriculture is a large sector within the Nigerian economy, accounting for 20.2% of GDP in 2014
 Food sales in Nigeria over the forecast period from 2016 to 2020 will grow by 10%, from NGN23bn in
2016 to NGN35bn in 2020.
 Yams was the leading agricultural product produced in Nigeria valued at USD10bn in 2013.
 The largest food sales in Nigeria over the five year forecast period are expected to be fresh vegetables
(NGN5.8bn in 2016 to NGN7.5bn in 2020).
 Nigeria has the second largest beer market in Africa, with significant room for expansion over the coming
years.
 Soft drinks are expected to be the largest non-alcoholic beverage sales in Nigeria over the period 2013 to
2020.

TRADE

 Nigeria is a net importer of food and beverages. Nigeria’s exports of food and beverages were valued at
ZAR12bn in 2014 compared to ZAR9bn in 2013, increasing by 26.9%, while imports were valued at
ZAR74bn in 2014 increasing by 32.5%.
 The largest import product into Nigeria was wheat and meslin valued at ZAR86bn.
 South Africa is a net exporter of food and beverage products from Nigeria. In 2014, South Africa exported
food and beverages valued at ZAR1.4bn compared to ZAR1bn in 2013, representing an increase of
39.4%.
 The leading export product to Nigeria from South Africa was apples, pears and quinces, valued at
ZAR602m, followed by food preparations (ZAR195m).
 Except for 2004, the Western Cape also had a positive trade balance with Nigeria from 2005 to 2014.
Exports were valued at around ZAR905m in 2014 compared to ZAR673m in 2013, increasing by 34.4%,
 The leading export product from the Western Cape to Nigeria in the food and beverages sector was fresh
apples, pears and quinces, valued at ZAR530m.

FDI
 Nigeria is a net recipient of FDI in the food and beverage sector.
 Between January 2003 and September 2015 a total of 54 FDI projects were recorded into Nigeria’s food
and beverage sector. These projects represent a total capital investment of ZAR41.46bn.
 South Africa and the United Kingdom were the leading source markets for Nigeria’s food and beverage
sector investments with 10 investment projects each from 2003 to September 2015.
 South Africa’s Shoprite was the largest investor into Nigeria’s beverage, food and tobacco sector, with 8
projects worth ZAR1.6bn.
 Between January 2003 and September 2015 a total of 10 FDI projects were recorded from South Africa
to Nigeria. These projects represent a total capital investment of ZAR3.95bn.
 Eight of the 10 food and beverage investment projects from South Africa to Nigeria were made by Western
Cape based Shoprite.
Table of Contents

1. Definitions/descriptions ............................................................................................................... 3
2. Overview of food and beverage market in Nigeria .................................................................... 3
2.1 SWOT analysis of Nigeria’s food and beverage sector .......................................................... 7
2.2 Companies .............................................................................................................................. 8
3. Trade............................................................................................................................................... 9
3.1 Nigeria’s Global Trade of Food and Beverages ...................................................................... 9
3.2 South African Trade of Food and Beverages with Nigeria .................................................... 12
3.3 Western Cape Trade of Food and Beverages with Nigeria .................................................. 13
3.4 Trade Regulations Markings and Standards ......................................................................... 14
3.4.1 Labeling Requirements and Markings........................................................................... 14
3.4.2 Standards ...................................................................................................................... 15
3.5 Tariffs for South African food and beverages ....................................................................... 15
4. FDI ................................................................................................................................................. 16
4.1 Inward FDI into Nigeria’s Food & Beverage Sector .............................................................. 16
4.3 Bilateral FDI between South Africa and Nigeria .................................................................... 17

2
1. Definitions/descriptions

According to FDI.net (2012), the food and beverage processing sector refers to the manufacturing, processing and
preservation of meat, fish, fruit, vegetables, oils and fats; manufacture of dairy products; manufacture of grain mill
products, starches and starch products and prepared animals feeds; manufacture of other food products (e.g.
bread, sugar, chocolate, pasta, coffee, nuts and spices); and the manufacture of bottled and canned soft drinks,
fruit juices, beer, wines, etc. This analysis includes unprocessed food and beverages such as raw fruit and
vegetables, seeds and nuts.

African countries spend more than USD60bn annually importing food for their growing populations, but the
continent has the potential to become a major food exporter. Large areas of unused arable land, low fertiliser use
and poor irrigation mean there is scope for improving yields in Africa, which are among the lowest in the world. A
rising middle class continues to boost African demand for food products, especially for processed and packaged
food, creating a continental food market that the World Bank estimates could be worth USD1trn in 2030. While
exporters in Asia and Brazil stand to gain in the short term, BMI Research (2015) forecasts that food producers,
processors and shippers in Kenya and South Africa, and retailers in Nigeria are all well placed to serve the growing
African consumer market.

2. Overview of food and beverage market in Nigeria

Agriculture is a large sector within the Nigerian economy, accounting for 20.2% of GDP in 2014. Despite this,
Nigeria is heavily reliant on imported food, spending NGN1.3trn on food imports annually. In 2016, the oil-
dependent country is facing economic headwinds, due to low oil prices, that have resulted in currency weakness
(BMI, 2016). Despite economic headwinds, Nigeria’s food and drink industry will experience solid growth in 2016
and over the long-term. This will be driven by Nigeria's relatively high GDP per capita (USD6,400) and large
population (182 million) that provides a substantial domestic market that is lucrative for investors (BMI, 2016).

Yams were the leading agricultural product in Nigeria valued at USD10bn in 2013. Cassava and citrus fruit were
ranked second and third valued at USD5.5bn and USD1.7bn respectively. Other top products include maize 3
(USD250m), groundnuts (USD184m) and rice (USD1.3bn) (FAO, 2016).

NIGERIA AGRICULTURAL PRODUCTION, 2013 (USDm)

Yams 10 329
Cassava 5 537
Fruit, citrus nes 1 718
Maize 1 473
Groundnuts, with shell 1 353
Rice, paddy 1 310
Vegetables, fresh nes 1 165
Sorghum 1 030
USDm
Cow peas, dry 991
Meat indigenous, cattle 913
Millet 907
Cashew nuts, with shell 832
Taro (cocoyam) 827
Okra 703
Meat indigenous, goat 701
Tomatoes 578
Plantains 574
Eggs, hen, in shell 539
Mangoes, mangosteens,… 509
Meat indigenous, sheep 470
0 2 000 4 000 6 000 8 000 10 000 12 000

Source: FAOSTAT, 2016

It is hard to argue with the idea that Nigeria is the ultimate opportunity in Sub-Saharan food retailing. It is estimate
that only 5% of the food retail market is formalised - that is, 95% of food sales are still accounted for by independent
stores and kiosks. Nigeria's GDP per capita is higher than the SSA regional average. Nigerians are relatively
wealthy; they have more disposable income, which will support the growth of the food and drink industry (BMI,
2016.

In addition, Nigeria offers a larger middle-income consumer group than the SSA average. Middle-income
consumers drive private consumption and maintain stable demand. Food consumption will continue to grow at a
steady rate; this growth will be supported by the adoption of formal retail.

Food sales over the forecast period to 2020 will grow by 10%, from NGN23bn in 2016 to NGN35bn in 2020, driven
primarily by increased GDP per capita, middle income consumers and large and growing population.

NIGERIA FOOD SALES, 2013-2020f

40 000 12%

35 000 10%

8%
30 000
6%
Value (NGNbn)

25 000

Growth
4%
20 000
2%
15 000
0%
10 000
-2%

5 000 -4%

0 -6%
4
2013 2014 2015 2016f 2017f 2018f 2019f 2020f
NGNm 20 309 21 945 21 213 23 423 25 795 28 576 31 678 34 859
Growth 8.31% 8.06% -3.34% 10.42% 10.12% 10.78% 10.86% 10.04%

Source: BMI Research, 2016

Despite the presence of global food producers, the production of processed food remains negligible in Nigeria and
imports are required to meet demand. With a large and growing population, Nigeria is arguably Africa's most
promising retail market. However, Nigeria carries greater risk than more modestly sized (in terms of population)
economies (BMI, 2016.

The largest food sales in Nigeria over the five year forecast period are expected to be fresh vegetables (NGN5.8bn
in 2016 to NGN7.5bn in 2020), rice (NGN4bn in 2016 to NGN7bn in 2020), root vegetables (NGN4bn in 2016 to
NGN6bn in 2020) and edible oils and fats (NGN2bn in 2016 to NGN3.5bn in 2020).
 NIGERIA FOOD SALES, 2013-2020f
8 000

7 000

6 000
Value (NGNbn)

5 000

4 000

3 000

2 000

1 000

0
2013 2014 2015 2016f 2017f 2018f 2019f 2020f
Fresh vegetables 5 201 5 621 5 413 5 814 6 216 6 662 7 099 7 465
Rice 3 417 3 693 3 549 4 045 4 596 5 271 6 081 6 948
Root vegetables and mushrooms 3 839 4 149 4 003 4 322 4 645 5 007 5 355 5 641
Cooking oils and fats 1 674 1 809 1 739 1 993 2 277 2 626 3 045 3 496
Edible oils and animal fats 1 653 1 787 1 717 1 970 2 252 2 598 3 015 3 463
Beef 1 579 1 706 1 639 1 859 2 103 2 400 2 756 3 136
Fish 1 216 1 314 1 260 1 366 1 476 1 602 1 747 1 893
Bread 915 989 949 1 057 1 174 1 314 1 480 1 655
Potatoes 1 014 1 095 1 050 1 126 1 204 1 290 1 388 1 482
Dairy 430 465 465 518 573 635 687 742
Pasta products 395 427 410 457 508 569 642 718
Milk products 291 315 327 376 426 483 528 578
Poultry 273 295 283 326 373 431 501 576 5
Yoghurt 267 288 301 347 395 447 487 532
Lamb 210 227 218 246 276 313 356 403
Canned fruit and fruit 354 382 338 333 328 325 323 319
Sugar 221 239 229 241 253 265 278 289
Shellfish and preserved fish 532 575 549 519 476 410 322 213
Eggs 99 107 97 98 99 100 102 103
Milk 37 40 38 41 44 48 52 57
Dried fruit and nuts 37 40 39 42 45 48 52 56
Leaf and stem vegetables 133 144 137 129 117 100 76 47
Baked goods 61 66 63 62 61 57 53 47
Fruit from vegetables 51 55 53 53 52 50 46 42
Butter 20 22 21 24 26 30 34 39

Source: BMI Research, 2016

Nigeria has the second largest beer market in Africa, with significant room for expansion over the coming years.
Beer sales are expected to grow by an average annual rate of 6% from 2016 to 2020. Beer is the most popular
alcoholic drink in the country by some way, accounting for around 95% of all sales. However the government has
imposed a ban on the import of beer in bottles or cans for trade, in order to support the domestic beer industry
(BMI, 2016).
 NIGERIA BEER SALES, 2013-2020f
2 500

2 000
milion litres

1 500

1 000

500

0
2013 2014 2015 2016f 2017f 2018f 2019f 2020f
Beer 1 584 1 682 1 724 1 801 1 899 2 019 2 160 2 316

Source: BMI, 2016

Barring beer, red wine is expected to be the largest alcoholic beverage sales in Nigeria over the five-year forecast
period to 2020 increasing by 4% from 11 million litres in 2016 to 12 million litres in 2020, followed by white wine
growing by 4%.

NIGERIA ALCOHOLIC BEER SALES, 2013-2020f

14

12

10
6
million litres

0
2013 2014 2015 2016f 2017f 2018f 2019f 2020f
Red Wine 9.7 10.4 9.7 11.1 10.9 11.6 10.7 11.7
White Wine 7.9 8.2 7.6 8.8 8.5 9.1 8.4 9.2
Whiskey 5.0 5.3 5.5 5.8 6.1 6.6 7.1 7.7
Liqueur 3.5 3.6 3.7 3.9 4.2 4.5 4.9 5.2
Vermouth 0.6 0.9 0.9 1.0 1.1 1.1 1.2 1.3
Gin 0.8 0.8 0.8 0.8 0.9 0.9 1.0 1.1
Vodka 0.6 0.7 0.7 0.8 0.8 0.9 0.9 1.0
Fermented drinks 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5

Source: BMI, 2016

The non-alcoholic drinks category is poised for robust growth. Strong growth in the category will largely be driven
by the carbonated soft drinks segment, which is set to outperform over the forecast period. The Nigerian beverage
industry is dominated by multinational companies. This also applies to tea and coffee as well as to soft drinks.

Soft drinks sales will also be driven by youthful demographics and low income levels, which are favourable
conditions for carbonates, will continue to drive growth. Nigeria's bottled water industry is also expected to
experience substantial growth over our forecast period. A lack of access to safe drinking water and rising incomes
will be important drivers behind this growth.
 NIGERIA NON-ALCOHOLIC DRINK SALES, 2013-2020
2 500

2 000
Value (NGNbn)

1 500

1 000

500

0
2013 2014 2015 2016f 2017f 2018f 2019f 2020f
Soft Drinks 1 211 1 327 1 291 1 458 1 639 1 850 2 085 2 327
Carbonated Drinks 811 888 878 1 007 1 148 1 314 1 500 1 696
Coffee 0 0 0 0 0 0 0 0
Fruit and vegetable juices 89 97 91 100 110 120 132 143
Mineral or spring waters 10 10 10 11 12 14 16 18
Tea 0 0 0 0 0 0 0 0

Source: BMI, 2016

2.1 SWOT analysis of Nigeria’s food and beverage sector

The table below shows the SWOT analysis of Nigeria’s food and beverage sector:
STRENGTHS
 With a rapidly increasing population of nearly 170mn,
Nigeria possesses a potentially dynamic consumer story.
 Nigeria produces a number of key agricultural crops locally
and is the world's fourth largest cocoa grower.
 Nigeria's beer industry is rapidly developing and is arguably
Africa's most promising.
 The mass grocery retail sector is growing from an extremely
low base, which could attract regional retailers seeking first-
mover advantage.
 South Africa-based Shoprite's decision to focus its regional
expansion efforts on Nigeria will raise the profile of the
industry and encourage greater consumer footfall.
7
WEAKNESSES
 High food inflation will negatively impact industry growth.
 Nigeria's regulatory environment is notoriously poor.
 The market for dairy goods, one of the higher value food
sub-sectors, is restricted by the lack of white goods in
most consumers' homes.
 Islamic law is in pace in the north of the country,
restricting sales of alcoholic drinks.
 High operating costs and weak internal trade systems are
two core reasons why international retailers have been
hesitant to enter the Nigerian retail market.

OPPORTUNITIES
 Per capita food consumption is expected to grow over the
coming years.
 Investment into the highly underdeveloped mass grocery
retail industry is likely to strengthen internal trade systems,
getting a wider range of consumer goods to a larger
consumer base.
 Proposed acquisition of SABMiller by AB-InBev could
potentially increase volume and value sales through a
diverse portfolio offering that is to aggressively compete in
all beer sub-categories.
 The risks attributed to consuming tap water will very likely
benefit the bottled water industry.
 The arrival of Massmart, Carrefour and Pick n Pay on the
Nigerian retail sector has the potential to revolutionise the
market.
Source: BMI Research, 2016
THREATS
 Unfavourable regulatory environment remain significant
investment deterrents.
 Widespread corruption and an unfavourable regulatory
environment remain significant investment deterrents.
 Competition from regional countries with better business
environments, such as Ghana, could see Nigeria lose out
on foreign direct investment.
 Ongoing security concerns in Nigeria's northern regions
and the related uncertainty, paired with high rates of
inflation, is affecting consumer spending.
 Lower near-term capital spending could lead to potential
entrants withholding entry until conditions show a
sustained improvement.
 2.2 Companies

The table below gives the key companies in Nigeria’s food and beverage sector:

NIGERIA FOOD AND BEVERAGE COMPANIES, 2016

COUNTRY OF SALES
COMPANY OWNERSHIP SUBSECTOR
ORIGIN (USDm)
Nigerian Breweries Nigeria Heineken Beverages - beer 1,686
Guinness Nigeria Ireland Guinness Beverages - beer 779
The Coca-
Nigerian Bottling Company Nigeria Beverage - soft drinks 1,590
Cola Company
Nestlé Nigeria Switzerland Nestlé Nestlé 858
Food – confectionery and
UAC Foods Nigeria UAC 516
savoury
Seven-Up Bottling Company Nigeria PepsiCo Beverage - soft drinks 468
Unilever Nigeria UK Unilever Food & beverage 350
Mondelēz
Cadbury Nigeria UK Food & beverage 184
International
Consolidated Breweries Nigeria Heineken Beverage - beer 50e
Pabod Brewery Nigeria SABMiller Beverage - beer 3e
Nasco Group Nigeria Nigeria NASCO Group Food -
Classic Beverages Nigeria Prima Group Beverage - soft drinks -
Source: BMI, 2016

8
3. Trade

3.1 Nigeria’s Global Trade of Food and Beverages

Nigeria experienced a negative trade balance from 2005 to 2014, making Nigeria a net importer of food and
beverages. Nigeria’s exports of food and beverages were valued at ZAR12bn in 2014 compared to ZAR9bn in
2013, increasing by 26.9%, while imports were valued at ZAR74bn in 2014 increasing by 32.5%.

NIGERIA FOOD & BEEVRAGE TRADE, 2005-2014

100 000
80 000
60 000
40 000
Value (ZARm)

20 000
0
-20 000
-40 000
-60 000
-80 000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exports (ZARm) 3 963 3 534 4 530 6 797 7 963 7 768 9 473 7 497 9 312 11 817
Imports (ZARm) 14 897 16 457 20 249 35 635 34 740 33 987 48 983 55 312 55 758 73 888
Trade balance (ZARm) -10 934 -12 923 -15 719 -28 838 -26 777 -26 219 -39 510 -47 815 -46 446 -62 072

Source: Trade Map, 2016

9
Netherlands was the leading export market for food and beverages from Nigeria 2014, valued at ZAR4.5bn and
growing by 14% per annum over the last five years. Germany and the United States were ranked second and third,
valued at ZAR1.3bn and ZAR859m respectively. Other top export markets were Vietnam (ZAR2.6bn), France
(ZAR515m) and Spain (ZAR506m). The top food and beverage exports to the top three destination markets are as
follows:

Netherlands
 Cocoa beans, ZAR4.4bn
 Crustaceans, ZAR488m
 Cocoa butter, ZAR653m

Germany
 Cocoa butter, ZAR488m
 Cocoa beans, ZAR182m
 Cocoa shells, ZAR45m

United States
 Cocoa beans, ZAR698m
 Cocoa butter, ZAR226m
 Crustaceans, ZAR61m
 NIGERIA’S EXPORT MARKETS OF FOOD & BEVERAGES,
2014
VALUE %
RANK DESTINATION MARKETS 2014 GROWTH
(ZARm) 2010-2014
1 Netherlands 4 549 13.53%
2 Germany 1 328 6.01%
3 United States 859 18.42%
4 Vietnam 791 48.64%
5 France 515 -4.57%
6 Spain 506 11.02%
7 Belgium 496 -4.45%
8 India 476 49.86%
9 United Kingdom 404 14.95%
10 Canada 361 28.45%
23 South Africa 27 7.22%
TOTAL EXPORTS 11 817 9.95%
Source: Trade Map, 2016

United States was the leading source market for food and beverages to Nigeria valued at ZAR10bn, followed by
Brazil and Thailand valued at ZAR7bn and ZAR6bn respectively. Other top import markets were Netherlands
(ZAR6bn), China (ZAR4bn) and Indonesia (ZAR3.2bn). The top food and beverage imports from the top three
source markets are as follows:

United States
 Wheat and meslin, ZAR9.7bn 10
 Ethyl alcohol & other spirits, ZAR605m
 Cane or beet sugar, ZAR427m

Brazil
 Cane or beet sugar, ZAR8.6bn
 Ethyl alcohol & other spirits, ZAR346m
 Maize (corn), ZAR126m

Thailand
 Rice, ZAR5.1bn
 Non-alcoholic beverages, ZAR170m
 Non-alcoholic beverages, ZAR60m
 NIGERIA’S SOURCE MARKETS OF FOOD & BEVERAGES,
2014
VALUE %
RANK SOURCE MARKETS 2014 GROWTH
(ZARm) 2010-2014
1 United States of America 9 460 8.10%
2 Brazil 7 066 13.38%
3 Thailand 6 059 65.23%
4 Netherlands 5 804 19.68%
5 China 3 808 21.79%
6 Indonesia 3 150 64.91%
7 Ireland 2 804 14.74%
8 France 2 744 23.17%
9 New Zealand 2 689 24.30%
10 India 2 661 258.30%
18 South Africa 1 447 33.03%
TOTAL IMPORTS 73 888 17.64%
Source: Trade Map, 2015

The leading export product into Nigeria was cocoa beans, valued at ZAR7bn. Cocoa butter (ZAR1.5bn) and
crustaceans (ZAR1bn) were the second and third largest exported products in the sector. There was strong growth
in the export of bran, sharps and other residues. The largest import product into Nigeria was wheat and meslin
valued at ZAR19bn. The fastest growing import product was fresh whole fish, growing at annual average growth
rate of 540%.

NIGERIA’S GLOBAL EXPORTS OF FOOD & BEVERAGES, 2014 NIGERIA’S GLOBAL IMPORTS OF FOOD & BEVERAGES, 2014
VALUE VALUE %
% GROWTH
RANK PRODUCT 2014
2010-2014
RANK PRODUCT 2014 GROWTH 11
(ZARm) (ZARm) 2010-2014
Cocoa beans, whole or broken,
1 6 789 25.85% 1 Wheat and meslin 18 843 55.46%
raw or roasted
2 Cocoa butter, fat and oil 1 580 24.15% 2 Fish, frozen, whole 9 736 25.28%
Cane or beet sugar and
3 Crustaceans 1 013 37.43% 3 chemically pure sucrose, in solid 9 242 58.02%
form
Brazil nuts, cashew nuts & Milk and cream, concentrated or
4 1 001 52.71% 4 8 542 101.15%
coconuts sweetened
5 Pasta & couscous 460 89.70% 5 Rice 7 354 413.82%
Cocoa shells, husks, skins and Malt extract; food preparations of
6 396 153.31% 6 5 569 122.11%
other cocoa waste flour, meal, starch or malt extract
Cocoa paste, whether or not
7 375 275.71% 7 Palm oil & its fraction 4 356 149.67%
defatted
Ginger, saffron, turmeric, thyme, Fish, cured or smoked and fish
8 359 60.98% 8 2 131 10.66%
bay leaves & curry meal fit for human consumption
Milk and cream, concentrated or
9 196 91.72% 9 Fish, fresh, whole 1 748 539.89%
sweetened
10 Bran, sharps and other residues 183 1765.12% 10 Tomatoes prepared or preserved 1 672 34.28%
TOTAL EXPORTS 11 817 9.95% TOTAL IMPORTS 73 888 17.64%
Source: TradeMap, 2016
 3.2 South African Trade of Food and Beverages with Nigeria

South Africa has a positive trade balance with Nigeria and is a net exporter of food and beverage products from
the country. In 2014, South Africa exported food and beverages valued at ZAR1.4bn compared to ZAR1bn in 2013,
representing an increase of 39.4%. South Africa imported food and beverages from Nigeria valued at ZAR27m in
2014 compared to ZAR25m in 2013, representing an increase of 7.8%.

SOUTH AFRICA'S FOOD & BEVERAGE TRADE WITH NIGERIA, 2005-

2014
1 600
1 400
1 200
Value (ZARm)

1 000
800
600
400
200
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exports (ZARm) 193.5 239.6 250.4 369.3 375.4 396.6 568.4 601.8 1 029.5 1 435.2
Imports (ZARm) 18.1 18.2 20.7 26.2 22.4 28.8 21.4 19.3 25.2 27.1
Trade balance (ZARm) 175.4 221.4 229.6 343.1 353.0 367.9 547.1 582.4 1 004.3 1 408.1

Source: Quantec, 2016

The leading export product to Nigeria was apples, pears and quinces, valued at ZAR602m, followed by food
preparations (ZAR195m) and Undenatured ethyl alcohol (ZAR98m). The largest growing export to Nigeria per 12
annum from 2010 to 2014 was apples, pears and quinces (348%), followed by Grapes (271%). The leading import
product into South Africa from Nigeria was Ginger, saffron, turmeric valued at ZAR15m, followed by oil-cake
(ZAR6m). Beer (ZAR0.8m) was the third largest import in value terms. Coconuts, brazil nuts was the largest growing
import into South Africa growing over the last five years.

SOUTH AFRICA’S EXPORTS OF FOOD & BEVERAGES TO SOUTH AFRICA’S IMPORTS OF FOOD & BEVERAGES FROM NIGERIA,
NIGERIA, 2014 2014
VALUE VALUE
GROWTH GROWTH
RANK PRODUCT 2014 RANK PRODUCT 2014
2010-2014 2010-2014
(ZARm) (ZARm)
Ginger, saffron, turmeric, thyme, bay
1 Apples, pears and quinces, fresh 601.9 348.13% 1 14.7 58.93%
leaves, curry
Food preparations not elsewhere
2 194.8 15.00% 2 Oil-cake and other solid residues 5.9 -
specified or included
3 Undenatured ethyl alcohol 98.2 100.87% 3 Beer made from malt 0.8 1009.51%
Coconuts, brazil nuts and cashew
4 Fruit juices and vegetable juices 93.4 62.17% 4 0.7 32702.56%
nuts
5 Wine of fresh grapes 86.1 11.13% 5 Ground-nuts 0.5 6262.76%
6 Soups and broths 67.1 18.46% 6 Cocoa powder 0.5 -
Undenatured ethyl alcohol; spirits,
7 58.3 25.99% 7 Waters, including mineral waters 0.4 94.94%
liqueurs
Sauces and preparations therefor; Dried vegetables, whole, cut, sliced,
8 31.9 172.89% 8 0.4 16.11%
mixed condiments broken or in powder
9 Grapes, fresh or dried 23.8 271.22% 9 Pasta, whether or not cooked 0.3 91.30%
Birds' eggs, in shell, fresh, preserved
10 19.2 161.97% 10 Other fermented beverages 0.3 291.94%
or cooked
TOTAL EXPORTS 1 435.2 33.06% TOTAL IMPORTS 27.1 6.23%
Source: Quantec, 2016
 3.3 Western Cape Trade of Food and Beverages with Nigeria

Except for 2004, the Western Cape also had a positive trade balance with Nigeria from 2005 to 2014. Exports were
valued at around ZAR905m in 2014 compared to ZAR673m in 2013, increasing by 34.4%, while imports were
valued at ZAR1.6m in 2014 compared to ZAR3.7m in 2013, decreasing by 56.4%.

WESTERN CAPE FOOD & BEVERAGE TRADE WITH NIGERIA, 2005-

2014
1 000
900
800
700
Value (ZARm)

600
500
400
300
200
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exports (ZARm) 38.3 70.2 88.8 121.7 136.7 124.3 271.0 314.8 673.2 904.7
Imports (ZARm) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.6 3.7 1.6
Trade balance (ZARm) 38.2 70.1 88.7 121.6 136.6 124.3 271.0 314.2 669.6 903.1

Source: Quantec, 2016

The leading export product from the Western Cape to Nigeria in the food and beverages sector was fresh apples,
pears and quinces, valued at ZAR530m. The second largest export to Nigeria was fruit juices (ZAR91m) followed
by wine (ZAR84m). Nigeria is South Africa’s 5th largest African export market for wine, accounting for 8%, with red 13
wine accounting for 65%, white wine 18%, rose 3% and sparkling wine 10%.

Oil-cake was the leading import product into the Western Cape from Nigeria valued at ZAR0.5m, followed by Cocoa
powder (ZAR0.5m), ground-nuts (ZAR0.2m).

WESTERN CAPE’S EXPORTS OF FOOD & BEVERAGES TO WESTERN CAPE’S IMPORTS OF FOOD & BEVERAGES FROM
NIGERIA, 2014 NIGERIA, 2014
VALUE VALUE GROWTH
GROWTH
RANK PRODUCT 2014 RANK PRODUCT 2014 2010-
2010-2014
(ZARm) (ZAR) 2014
Oil-cake and other solid
1 Apples, pears and quinces, fresh 529.6 351.58% 1 508 631 -
residues
2 Fruit juices and vegetable juices 91.3 67.04% 2 Cocoa powder 498 416 -
3 Wine of fresh grapes 83.8 11.54% 3 Ground-nuts 179 128 -
Undenatured ethyl alcohol; spirits, Ginger, saffron, turmeric,
4 57.2 27.36% 4 104 010 264.9%
liqueurs thyme, bay leaves, curry
5 Food preparations nes 22.0 109.57% 5 Dried vegetables 51 434 -
Waters, including mineral
6 Grapes, fresh or dried 21.3 265.64% 6 51 282 89.2%
waters and aerated waters
Flours, meals and pellets, of meat Pasta, whether or not cooked
7 17.7 - 7 50 902 409.4%
or meat offal, of fish or stuffed
8 Other fermented beverages m 6.2 154.32% 8 Soups and broths 20 886 -
Manioc, arrowroot, salep,
9 Prepared foods of cereals 5.8 53.74% 9 jerusalem artichokes, sweet 18 689 51.6%
potatoes
Fruit, dried; mixtures of nuts or Coconut (copra), palm kernel
10 4.8 276.08% 10 16 511 -
dried fruits or babassu oil
TOTAL EXPORTS 904.7 54.66% TOTAL IMPORTS 1 607 618 271.5%
Source: Quantec, 2016
 Milk and cream was the fastest growing export products in the short term (2013 to 2014), growing at 1,052%
followed by melons and papaws; and birds eggs growing at 768% and 757% respectively. In the medium term
(2010-2014), the fastest growing export product category was also meat of bovine animals.

WESTERN CAPE EXPORTS OF FOOD & BEVERAGES WESTERN CAPE TRDAE OF FOOD &
TO NIGERIA BY GROWTH, 2013-2014 BEVERAGES WITH NIGERIA, 2010-2014

Milk and cream 1052% Meat of bovine animals, frozen 1359%

Melons and papaws 768% Fruit and nuts 1247%

Birds' eggs 757% Fish, frozen 706%

Fish, frozen 606% Fish, dried, salted or in brine 694%

Other meat and edible meat offal 533% Maize 545%

Ginger, saffron, turmeric, thyme, curry 472% Meat of swine 462%

Apricots, cherries, peaches, plums 469% Other nuts 459%

Fruit, dried; 310% Fish fillets and other fish meat 422%

Milk and cream, concentrated 293% Apples, pears and quinces 352%
2013-2014 2010-2014
Tea 267% Citrus fruit 306%

Cabbages, cauliflowers, kohlrabi, kale 254% Other preserved meat, offal or… 283%

Fruit and nuts 253% Fruit, dried; 276%

Waters, including mineral waters 216% Grapes 266%

Grapes 202% Apricots, cherries, peaches, plums 264%

Other nuts 188% Dates, figs, pineapples,… 235%

Crustaceans, molluscs 168% Dried leguminous vegetables 223%

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Cinnamon and cinnamon-tree flowers 145% Vegetables, fruit, nuts 219%

Cloves 143% Milk and cream 213%

Maize 137% Ginger, saffron, turmeric, thyme,… 194%

Citrus fruit 134% Waters, including mineral waters 179%

Food preparations nes 123% Crustaceans, molluscs 164%

Dates, figs, pineapples, avocados,… 113% Dried vegetables 157%

Pepper of the genus piper 112% Other fermented beverages m 154%

Starches 100% Cinnamon and cinnamon-tree… 125%

0% 200% 400% 600% 800% 1000%1200% 0% 500% 1000% 1500%

Source: Quantec, 2016

3.4 Trade Regulations Markings and Standards

3.4.1 Labeling Requirements and Markings

The Nigerian government requires that products entering the country must display information including:
 name of product,
 country of origin, specifications,
 date of manufacture,
 batch or lot number,
 standards to which they were produced (e.g. BS, DIN, ISO/IEC, NIS, etc) and in the case of items such
as soap, food and drinks and related products,
  they should carry the expiration date or the shelf life, as well as active ingredient(s), where applicable.
Also, all items entering the country must be labeled in metric terms exclusively. Products with dual
or multiple markings will be confiscated or refused entry.

3.4.2 Standards

Overview
The Standards Organization of Nigeria (SON) registers and regulates standard marks and specifications. The
National Agency for Food and Drug Administration and Control (NAFDAC) provides testing and certification of
imported and domestically produced food, drug, cosmetic, medical, water and chemical products.

Standards Organizations
Member countries of the World Trade Organization (WTO) are required under the Agreement on Technical Barriers
to Trade (TBT Agreement) to report to the WTO all proposed technical regulations that could affect trade with other
Member countries. Standards Organization of Nigeria (SON) www.son.gov.ng; National Agency for Food and Drug
Administration and Control (NAFDAC) www.nafdac.gov.ng

Product Certification
Information regarding product certification is available on the Standards Organization of Nigeria (SON) website:
www.sononline-ng.org and National Agency for Food and Drug Administration and Control (NAFDAC) website:
www.nafdacnigeria.org.

3.5 Tariffs for South African food and beverages

Nigeria imposes the highest tariffs on the import of Fish, crustaceans, molluscs, aquatic invertebrates from South
Africa at 34%. This is followed by Cocoa and cocoa preparations with an imposed tariff of 31%.

TARIFFS IMPOSED BY NIGERIA TO SOUTH AFRICAN FOOD AND BEVERAGE IMPORTS, 2014
15
HS EQUIVALENT AD
PRODUCT
CODE VALOREM TARIFF
02 Meat and edible meat offal 0
03 Fish, crustaceans, molluscs, aquatic invertebrates nes 34.9
04 Dairy products, eggs, honey, edible animal product nes 11.3
07 Edible vegetables and certain roots and tubers 23.9
08 Edible fruit, nuts, peel of citrus fruit, melons 19.1
09 Coffee, tea, mate and spices 10.9
10 Cereals 7.7
11 Milling products, malt, starches, inulin, wheat gluten 14.8
15 Animal,vegetable fats and oils, cleavage products, etc 19.9
16 Meat, fish and seafood food preparations nes 24.9
17 Sugars and sugar confectionery 19
18 Cocoa and cocoa preparations 30.7
19 Cereal, flour, starch, milk preparations and products 19.9
20 Vegetable, fruit, nut, etc food preparations 19.6
21 Miscellaneous edible preparations 15.3
22 Beverages, spirits and vinegar 18.6
Source: TradeMap, 2016
 4. FDI

4.1 Inward FDI into Nigeria’s Food & Beverage Sector

Between January 2003 and September 2015 a total of 54 FDI projects were recorded into Nigeria’s food and
beverage sector. These projects represent a total capital investment of ZAR41.46bn which is an average
investment of ZAR767.47m per project. During the period, a total of 15,748 jobs were created. Nigeria is a net
recipient of investment in this sector.

INWARD FDI INTO NIGERIA FOOD AND BEVERAGES, 2003- SEPTEMBER

2015
12 000 14

10 000 12

10
Value (ZARm)

8 000

Projects
8
6 000
6
4 000
4

2 000 2

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Exports (ZARm) 5 964 347 882 1 261 2 086 2 850 9 613 1 383 4 321 3 002 195
Projects 6 1 1 2 3 4 8 5 12 2 1

Source: FDI Intelligence, 2016 16

South Africa and the United Kingdom were the leading source markets for Nigeria’s food and beverage sector
investments with 10 investment projects each from 2003 to September 2015, followed by the United States and
Japan with 5 projects and 4 projects respectively.

GLOBAL FDI INTO NIGERIA’S FOOD, BEVERAGE & TOBACCO SECTORS, 2003- SEPTEMBER 2015
RANK SOURCE COUNTRY PROJECTS % PROJECTS CAPEX (ZARm) % CAPEX COMPANIES
1 South Africa 10 18.52% 3 950 9.53% 3
2 UK 10 18.52% 13 143 31.70% 7
3 United States 5 9.26% 4 615 11.13% 4
4 Japan 4 7.41% 1 159 2.80% 3
5 Singapore 4 7.41% 4 297 10.36% 2
6 Greece 3 5.56% 4 362 10.52% 3
7 Ireland 3 5.56% 847 2.04% 2
8 Switzerland 3 5.56% 2 359 5.69% 1
9 Italy 2 3.70% 586 1.41% 1
10 Netherlands 2 3.70% 3 206 7.73% 2
TOTAL 54 100.0 41 456 100.0 35
Source: FDI Intelligence, 2016
South Africa’s Shoprite was the largest investor into Nigeria’s beverage, food and tobacco sector, with 8 projects
worth ZAR1.6bn, followed by Guinness Nigeria; Nestle and Olam International.

COMPANIES INVESTING INTO NIGERIA’S FOOD & BEVERAGE SECTOR, 2003-SEPTEMBER 2015
INVESTING COMPANY ACTIVITY PROJECTS CAPEX (ZARbn)
Shoprite South Africa 8 1 584
Guinness Nigeria United Kingdom 3 3 469
Nestle Switzerland 3 2 359
Olam International Singapore 3 4 062
Coca-Cola United States 2 3 471
Glanbia Ireland 2 581
Industrie Alimentari Italy 2 586
SABMiller United Kingdom 2 2 461
West African Seasoning (WASCO) Japan 2 886
Zambeef (Zambeef Products) Zambia 2 300
TOTAL 54 41 456
Source: FDI Intelligence, 2016

4.3 Bilateral FDI between South Africa and Nigeria

Between January 2003 and September 2015 a total of 10 FDI projects were recorded from South Africa to Nigeria.
These projects represent a total capital investment of ZAR3.95bn which is an average investment of ZAR394.86m
per project. During the period, a total of 2,060 jobs were created. Eight of the 10 food and beverage investment
projects from South Africa to Nigeria were made by the Western Cape’s based Shoprite.
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Highlights of the investments below were as follows:

In 2015 South Africa-based retailer Shoprite invested in Nigeria’s food and tobacco sector in a retail project valued
at ZAR195m. Shoprite plans to open 14 new stores in Nigeria. The stores are expected to be operational by April
2017 and will compliment a soon to be established distribution centre also planned for the country.

In 2014 Distell Group invested in Nigeria’s beverages sector in a manufacturing project. Distell plans to establish
a new manufacturing facility in Nigeria. The planned development is part of a wider growth strategy which will see
an additional facility established in Angola.

In 2013 Shoprite invested in the city of Kano in the food and tobacco sector in a retail project. Shoprite has opened
a new store in Kano, Nigeria. The USD20m store covers 24,000 sq m and will provide a range of goods to the local
market.

FDI FROM SOUTH AFRICA INTO GHANA FOOD & BEVERAGES SECTOR, 2003- SEPTEMBER 2015
INVESTING SOURCE INDUSTRY VALUE
DATE SUB-SECTOR
COMPANY PROVINCE ACTIVITY (ZARm)
Food & Beverage Stores (Food
Aug 2015 Shoprite Western Cape Retail 194.5
& Tobacco)
Jun 2014 Distell Group Western Cape Breweries & distilleries Manufacturing 1 713.0
Sep 2013 Clover Industries Gauteng Dairy products Manufacturing 652.6
Food & Beverage Stores (Food
Aug 2013 Shoprite Western Cape Retail 194.5
& Tobacco)
Food & Beverage Stores (Food
Jun 2013 Shoprite Western Cape Retail 194.5
& Tobacco)
Logistics,
Food & Beverage Stores (Food
Aug 2012 Shoprite Western Cape Distribution & 233.2
& Tobacco)
Transportation
Food & Beverage Stores (Food
Jun 2012 Shoprite Western Cape Retail 184.0
& Tobacco)
 Food & Beverage Stores (Food
Aug 2010 Shoprite Western Cape Retail 194.5
& Tobacco)
Food & Beverage Stores (Food
Sep 2008 Shoprite Western Cape Retail 194.5
& Tobacco)
Food & Beverage Stores (Food
Dec 2005 Shoprite Western Cape Retail 194.5
& Tobacco)
Total 3 949.8
Source: FDI Intelligence, 2016

There was no FDI from Nigeria into the South African food and beverages sector.

There was no inward investment into the food and beverage sector from Nigeria into the Western Cape.

For more information on this publication and other Wesgro publications please contact research@wesgro.co.za or for more
publications visit the Wesgro publications portal on our website at http://wesgro.co.za/publications

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