Accommodation and Food Services Sector 2010-2012 - NBS

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Tuesday January 27, 2015 / 11.46AM /National Bureau of Statistics


REVIEW OF THE NIGERIAN ACCOMODATION AND FOOD SERVICES SECTOR

 

The services sector primarily engages in hosting services such as restaurants, hotels, bars, cruise lines and many other related businesses. Globally, the services sector is a multi-billion dollar sector, however, in Nigeria, the most economically active of the services’ sector’s development is found in accommodations and food services. The origins of the modern Nigerian hotel industry dates back to 1942 with the opening of the Lagos Airport Hotel.

The 1950s saw the opening of hotels such as the Bristol Hotel (1956) and the Federal Palace (where Nigeria’s Declaration of Independence was signed) amongst others. More hotels opened across the nation in the 1960s and 1970s, including the Hotel Presidential in Port Harcourt in 1963, the Eko Holiday Inn (1976), the adjacent Eko Hotel in 1977, the Festac 77 Hotel in 1977 and the three Gateway Hotels in Abeokuta, Ijebu-Ode and Ota in 1979. Most were developed by the government, in the absence of capacity in the private sector of this newly independent country.

The oil boom of the 1980s brought high demand for hotel rooms, after the oil-related boom, demand dropped considerably in the mid-1990s, as Nigeria’s military government was isolated from the international community.

The country’s return to democratic rule in 1999 saw a resurgence in demand, as improved economic and political stability resulted in an improved business environment, and encouraged foreign and local investment in infrastructure, oil & gas and telecommunications, amongst other sectors. Beginning in 2001, there was an influx of regional and international chains.

The Nigerian hotel industry was not significantly affected by the 2008/2009 global economic crisis. Regional and internationally branded hotels continued to open, primarily in Lagos but also in Abuja and Port Harcourt, three of the largest cities – the commercial, political and oil capitals, respectively.

Long before the discovery of oil and the consequent reliance on petrodollars by Nigeria as a major source of revenue, Nigeria was primarily an agrarian economy, with more than 80% of the population earning a living from and working in the agricultural and related industries.

Most of the farmers during this period were mainly subsistence farmers, who normally brought any unwanted or excess produce to the local market to sell; firstly to avoid wastages, and also to earn extra cash which they would then use to purchase household supplies.

The local markets became a regular hang out for friends hence the need to snack on light snacks before going home to enjoy a home cooked meal, such light snacks were usually in the form of fried bean cakes, known as akara and also fried kneaded dough that is known as buns or puff-puff. This began the local fast food trade, at this time; the local fast-food trade was largely dominated and operated by women, who also recruited their young children and relatives into the trade. For the children, their job was primarily to hawk the wares, which are usually carried on their heads as they walked around the market squares or village.

This new trade became lucrative and expanded to include local schools, government buildings, building sites and other such public places where there was a more regular and constant demand. Development brought education and educated youths migrated to the urban cities where there were job opportunities. This heralded the next stage of growth for the fast-food sector, with the setting up of what is known locally as “mama-put” or “bukkas”.

The Nigerian fast-food industry entered another major phase in 1985, when the United African Company (UAC) launched the Mr. Biggs brand, Nigeria’s biggest fast-food franchise. With the advent of Mr. Biggs, the fast-food industry changed. Mr. Biggs was like a fast-food revolution, an idea that was long overdue.

This began the boom in the fast food and restaurant industry, people began to view the industry as lucrative, and as the population grew so did the demand for more restaurants. Over the course of the last 13 years a tremendous amount of growth has happened in this industry leading to the rise of fast food restaurant chains, hotels and Nightlife covering a wide range of styles, presentations and quality, currently there are over 70 different indigenous fast-food franchises and countless number of restaurants in Nigeria.

However, regardless of the growth in this industry, and the great potential for contributing to Nigeria’s economy, specifically in the area of job creation, the nation is yet to fully embrace the industry as a major economic player and a source of national income. Based on the rebased GDP figures, the accommodation & food services sub-sector contributed about 0.45% of the nation’s total value of goods and services in 2010 and 2011 and 0.49% in 2012.

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