A Pan-African rating agency, Agusto & Co. report has said that the Nigerian fast food industry witnessed a spontaneous growth in 2013, grossing a total of N230 billion in turnovers up from the N200 billion as against what was recorded in 2012. The report titled: “2014 Industry Reports,” which highlighted several challenges facing the food, telecommunication, agriculture and other important sectors of the Nigerian economy, said that based on the rebased GDP figures, the accommodation & food services sub-sector contributed about 0.47 per cent of the nation’s total value of goods and services compared to 0.55 per cent in 2012.
The report noted that the lower contribution was as a result of the GDP rebasing exercise, which resulted in a significant increase in the size of the national economy, but projected a 15 per cent growth for the fast food industry in 2014, explaining that the fast food target market accounts for about 30.5 per cent of the country’s population, an estimate of about 51.8 million persons. “Nevertheless, we expect the fast food industry’s revenue to grow by about 15 per cent to a N265 billion in 2014 as new restaurants are opening (both local and indigenous) to meet the demand of the growing population of the fast food target market which include individuals within the 25-45 years bracket,” the report said, noting that one of the problems facing the fast food industry was over reliance on imported goods.
The report noted that most fast food raw materials with the exception of perishables such as vegetables are imported, adding that the supply of these food items in Nigeria is restricted due to the ban on importation on some of these items as well as high tariffs/duties on others in a bid to develop local markets, which it said led to the high prices of raw materials in the sub sector. “We estimate that raw materials (food & beverage) made up about 45 per cent of the industry’s costs, followed by property (rent, maintenance & depreciation) at 18 per cent and energy at 15 per cent,” the report said, while also noting that in terms of revenue generation, proteins (meat, chicken, and fish) and traditional cuisine contributed about 30 per cent and 20 per cent respectively of total sales.