Reckitt Benckiser Group Plc, sees Nigeria as a potential high-growth market to rival Brazil in the long term even as Africa’s biggest economy struggles to cope with sliding oil prices and currency restrictions.
“Businesses that have a long-term outlook will become very successful in Nigeria because the potential of this country is immense,” Chief Executive Officer Rakesh Kapoor said in an interview on Wednesday in Lagos, Nigeria’s commercial capital. “If you want to invest in Nigeria, do not do that with the promise of immediate return in the next quarter or in the next 12 months.”
RB sales have declined in Nigeria as the economy weakens, Kapoor said. The country is reeling from falling crude prices, while foreign-currency controls imposed by the central bank have led to an overvalued naira and restrictions on imports. President Muhammadu Buhari’s government is also at risk of repelling investors after imposing a $5.2 billion fine on MTN Group Ltd., the nation’s biggest mobile-phone company, that analysts say is excessive.
“We are still growing but we are not growing at the same rate we were growing a couple of years ago,” Kapoor said. “Have some of the economic challenges from lower oil prices impacted this country? Yes they have.”
RB shares were little changed at 6,414 pence as of 8:19 a.m. in London, valuing the company at 45.5 billion pounds ($69.8 billion).
In Nigeria’s favor is a relatively young population, which is Africa’s biggest at about 180 million people, the CEO said. About 44 percent of Nigerians are under 15, according to U.S. Census Bureau Data, compared with 28 percent in South Africa and 17 percent in the U.K., where RB is based.
“Look at the demographics of this country,” Kapoor said. “You still have a large number of young children going into jobs, going into employment and creating economic health and prosperity.”
Nigeria must invest more in health, security and infrastructure and improve corporate governance, Kapoor said. If it succeeds, the country will grow in importance for RB, which sells products in almost 200 countries.
“It can rank alongside — in my opinion — in 20 to 30 years, Brazil and Russia, which would make it one of the most important markets,” he said.