How Corporates Are Faring Going Into #Elections2019 – Doyin Salami (3)

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Thursday, November 01, 2018   02:25PM  / By Doyin Salami / WebTV   


From the presentation presented on October 25, 2018 at the LBS alumni Networking Lunch by Dr. Doyin Salami, Chiar, NESG Economics Faculty and member of faculty, Lagos Business School, which focused on the theme  “2019 Elections And Your Business”.


In this third part, we conclude with a look at how corporates are faring going into the election year; and what lessons we can pick for plans in 2019.



In the aggregate, corporates are contending with tight margin conditions

  • As rate of increases in consumer prices moderate, aggregate production costs are rising sharply
  • Indeed, in the second quarter, we observe an intersection between declining inflation in consumer prices, and sharply rising increases in production costs
  • This implies that the scope for margins for businesses, in the aggregate, are acutely tightening


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Source: LBS/ Doyin Salami


1.       Growth in aggregate GDP as well as and especially in Non-Oil GDP represents production levels

2.      The aggregate GDP deflator, measured at farm and factory gate, is a measure of economy-wide production costs (in the absence of a Producer Price Index)

3.      The consumer price Inflation rate, represented by rates of change in the Consumer Price Index (CPI), measures changes in the prices consumers face at the marketplace



The searchlight is on the Industrial Commercial Companies…

  • African Petroleum/Fortes
  • Cadbury Nigeria Plc.
  • Conoil Plc.
  • Julius Berger
  • Nestle Nigeria Plc.
  • Total Nigeria Plc.
  • 7 Up Bottling Company
  • Flour Mills
  • John Holt
  • Oando/Unipetrol
  • Guinness Nigeria Plc.
  • Texaco Nigeria Plc./Chevron/MRS
  • Nigeria Bottling Company Plc.
  • Nigerian Breweries
  • Dangote Sugar Refinery Plc.
  • United Nigerian Textiles
  • Seplat Oil & Gas
  • Ashaka Cement Plc.
  • Dangote Cement
  • Benue Cement (taken over by Dangote Cement in 2009)
  • Lafarge Cement WAPCO Nigeria
  • P.Z. Industries/P.Z. Cuzzons Nigeria Plc.
  • Dunlop
  • Mobil Plc.
  • Transnational
  • UAC of Nigeria Plc.
  • Unilever Plc.
  • Union Dicon



They collectively account for about 5% of the economy



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Source: LBS/ Doyin Salami



Sales growth has slowed over the past two years, outstripped by sales costs; inventory has piled on, albeit easing in 2017

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Source: LBS/ Doyin Salami


Corporates have sustained margins and returns in the face of pressure by easing volumes

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Source: LBS/ Doyin Salami



Balance sheets are contracting in inflation-adjusted terms, are less liquid and under pressure from high receivables & inventory

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Source: LBS/ Doyin Salami



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Coverage of the Presentation

  1. Ahead of Elections 2019: Where is the Economy Now? The State of the Nigerian Economy – Doyin Salami (1)
  2. What Will Be The Impact Of #Elections2019 On Business - Critical Issues Identified By Doyin Salami (2)
  3. How Corporates Are Faring Going into #Elections2019 – Doyin Salami (3)



Download Presentation

PDF : The 2019 Elections And Your Business - Doyin Salami, LBS - Oct 25, 2019



Other Related Post From Doyin Salami

  1. #NES24: Leveraging Domestic Resource Mobilization For Sustainable Development(2) Oct 29, 2018
  2. #NES24: Fiscal Governance And Taxation in Nigeria - Dr. Doyin Salami Oct 25, 2018
  3. #NES24: Economic Questions for Nigeria’s Transition from Poverty to Prosperity – Dr. Doyin Salami Oct 24, 2018
  4. #NES24:Stakeholders Explore Leveraging Domestic Resource Mobilisation for Sustainable Development Oct 24, 2018



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