Economy
Open-Air Markets Account for 97% of Nigeria’s Retail Sales
By Modupe Gbadeyanka
A new report by the Boston Consulting Group (BCG) has revealed that the retail sales landscape in Nigeria is dominated by open-air markets despite an increase in supermarkets, convenience stores, and other modern formats.
In the survey, it was disclosed that over 600,000 small shops and open-air markets are in the country’s retail space, accounting for 97 per cent of national sales of food, beverages, and personal care products.
The report The Future of Traditional Retail in Africa showed that African consumers on average continue to buy more than 70 per cent of their food, beverages, and personal care products from the continent’s more than 2.5 million small, independent shops despite the rise in e-commerce and changes in consumer behaviour accelerated by the COVID-19 pandemic.
“The willingness of traditional retailers to diversify, and embrace digital solutions coupled with the growing interest of investors to provide digital solutions show they will find opportunities to grow and remain the cornerstones of African economies in the future,” said, Stefano Niavas, Managing Partner in BCG Nigeria, and co-author of the report.
The report noted that modern retail remains very fragmented and is led by international hypermarket brands. Modern chains are struggling to expand due to currency devaluation, underdeveloped and inefficient transportation infrastructure, poor logistics capabilities, inadequate electrical power, and other complex challenges.
More importantly, the digital maturity of shop proprietors is also substantially higher than the national average. The level of financial inclusion varies widely across the region and is generally in line with the general population. While 85 per cent of Kenyan shop managers have a bank account, only 40% of their counterparts in Nigeria have one.
High numbers of African retailers also reported that they feel under pressure from modern retailers. In response to such challenges, traditional shops are diversifying well beyond daily essentials, such as fresh and packaged foods and home cleaning and personal hygiene products. Many small retailers now sell telecom products, such as prepaid cards and SIM cards.
New Digital Solutions
Several digital technology providers are addressing inefficient distribution systems that often force retailers to close their shops for several hours so they can go purchase goods from wholesalers.
The Nigerian B2B digital marketplace Alerzo, for example, enables more than 100,000 users—90 per cent of whom are women—to purchase inventory directly from manufacturers, receive and make cashless payments, and better track their revenues.
Digital marketplace in Nigeria such as Alerzo also facilitates a portfolio of digital services, including airtime purchases, bill payments, and peer-to-peer transfers. In the long run, such platforms aim to provide super apps with a large selection of services.
This would enable them to totally digitize traditional retailers and integrate them into the formal economy. Start-ups are also providing working capital and financial management systems to help traditional retailers grow and run their businesses more efficiently; however, they must overcome a lack of awareness and training among retailers.
The Future of Retail in Africa
The study found that traditional retailers will continue to dominate. But to thrive, they must modernize by offering new services and leveraging opportunities offered by digital solutions.
Niavas added, “Based on our analysis, many small retailers are already aware of the evolving retail landscape and are ready to improve their business premises, quality of products and expand across the country.”
Based on current trends, the modern retail sector in Nigeria, even though it is growing fast, is likely to remain small, and still may not account for more than 5 per cent of retail sales by 2030. Due to structural problems in Nigeria mentioned earlier, foreign investors are likely to remain hesitant about entering the market.
Given the central role that traditional shops will continue to play in Africa’s retail landscape, there will be a number of opportunities for various players in the ecosystem as the environment evolves.
Investment funds can find opportunities to provide capital and management expertise that will enable local modern retail chains to scale up in new cities.
An active start-up ecosystem is interested in providing digital solutions that will solidify the role of traditional retail in Africa and enable the sector to become the commercial interface across the continent.
Digital solutions can help manufacturers of fast-moving consumer foods improve their control over go-to-market strategies and provide data to better understand retailers.
Banks and telecom providers can achieve growth by developing new business models and offers that are adapted to traditional retailers’ needs.
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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