Moroccan, Kenyan and South African companies have been identified as Nigeria’s leading competitors in the African Continental Free Trade Area market, analysts at PricewaterhouseCoopers (PWC) have predicted.
The consulting firm made this projection in a publication titled ‘AfCFTA- Thriving in a new Africa’.
The analysts at PwC led by Partner and Chief Economist, PwC Nigeria, Andrew Nevin and Partner and Advisory Leader, Cyril Azobu explored the AfCFTA and its potential impact on Nigerian businesses.
They identified Morocco as a large economy with comparative advantage to compete with Nigeria’s agribusinesses.
According to them, processed agriculture firms in Morocco pose a big threat to Nigerian businesses due to their current production and export capacity as well as adherence to global standards.
PwC identified a Moroccan agro-industrial company that refines oil, manufactures and markets soaps and packaging material as potential competitor to Nigerian businesses.
According to the report, the firm, whose name was not mentioned, currently has the capacity to export its products to approximately 40 countries, primarily in Africa and the Mediterranean.
The report stated, “Now that the AFCFTA has become effective, the firm is poised to successfully export its products and compete for market share in Nigeria.
“This company could potentially serve as competition to market offerings of key local players in Nigeria including Mamador and Devon King, Grand Oil, Power Oil and Famili Pure Vegetable Oil, among others.”
In the retail and trade sector, PwC said retail stores in Kenya had a rong competitive advantage due to availability of e-commerce channels, adherence to global standards and experience with regional expansion.
The analysts identified an indigenous player in Kenya, which started off as a mattress store and grew from a single wholesale shop to a chain of branches across Kenya and Uganda, offering online retail services.
They said the company’s major advantage was its experience in expanding to a neighbouring country, indicating the ability to replicate its success outside its home country.
This company, according to PwC, could potentially serve as competition to key local players in the market like Park ‘n’ Shop, Prince Ebeano, Grand Square, Domino Supermarket, CCD Superstores and Genesis Supermarket.
“This suggests that this company has the experience required to expand its footprint to Nigeria, now that the AFCFTA is effective,” the report stated.
In the Fast Moving Consumer Goods sector, the report identified a South Africa producer and distributor of a range of branded food and beverage products that exports to more than 60 countries as a major competitor to Nigerian businesses.
The analysts said with the company’s essential grocery products it could potentially serve as acompetition of market offerings like Golden Penny Pasta, Dangote Pasta, Dangote Flour, Honeywell Pasta and Honeywell Flour.
PwC suggested that operators in Nigeria’s FMCG sector could invest in processes and quality management in line with international standards to enhance their competitiveness.
The consulting firms urged them to explore partnerships with global and local companies to strengthen value chain.
The analysts advised retail and trade firms in Nigeria to explore backward integration, diversification, e-commerce and privately labelled merchandise to remain competitive.