We began tracking this sector after it showed clearly on our radar that despite all the digitization playbooks, a big component of Nigeria remains outside the digital world. Yes, the Naira redesign showed that we have a lot of work ahead, just as the pandemic made it clear that our universities were not networked and wired for the online age, despite all the promises.
Good People, retail B2B in Nigeria is doing really well. As US dollars separate from the Naira with our deteriorating exchange rate, the makers’ cities like Aba and Kano are having moments. The data shows that most importers are now looking inwards to serve their markets. And companies working to formalize those markets are capturing massive value.
That tailor, that shoemaker, that bag-maker, and others offer huge latent opportunities which could be unlocked. Tekedia Capital is going to invest 100% of the round-funds by one of the players in this space in our next investment syndicate which begins on Monday. Led by bankers, but connecting shop by shop in Kano, Aba, etc, they’re growing at great percentages.
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In this sector, you can decide to organize tailors, shoemakers, etc for a broad retail fashion sector. You can also focus on FMCGs and basic household needs. In other words, organizing these domains now that few can import due to exchange rate, is at the moment, growing faster than the average growth rates of fintech companies. Lagos shoe importers are now bulk-buying at Aba.
There are massive trade services available in the value chain and I expect massive growth in this sector, even if the Naira recovers. I do think now that people cannot afford the Italian shoes, and are giving Aba a look, most will realize that Aba does make good shoes. The same is happening on suits, dresses, etc across the country with Kano and Ibadan showing on the antenna.
At Tekedia Capital, we’re investing, picking one of the leading firms, already being provided support by the Bank of Industry, which has unveiled a nice playbook. This startup’s numbers are outperforming the averages from the fintech space we are seeing.
One can understand how such an economic situation will force ppl to look inwards, but the value here can be maximally captured if even the raw materials are sourced locally.
I don’t know how much leather is produced now, but if it’s also imported, that will mean the end products…
— Odianosen Ejale (@OdianosenEjale) September 27, 2023
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Good to know. Just that the goalposts of problems in Nigeria keep shifting, diesel is now over N1000 per litre, and it is no joke. Distribution cost is about to erode any value previously captured in the retail or commercial value chain. It is getting more chaotic by the day.
Thanks so much for this Prof . I believe that Nigeria can be competitive in the sectors of the economy that we have access to raw materials like the skin leather for making shoes . We only need to amplify the development of skills and technology/ machinery for mass production. Africa must rise from being the farmers of the world / raw materials producers to deliberately add value so that we can build wealth .