Business

Nigeria attractive destination for foreign investors – Philip Morris Limited MD

Why did you venture into the Nigerian market at the time you did?

Africa is at the forefront of investment focus for many international companies across a wide range of industries. Within Africa, Nigeria’s human and natural resources, combined with the fact that there has been political stability and democratic governance since 1999, make the country an attractive investment destination.

We commenced business in Nigeria in 2015, after obtaining all necessary statutory and regulatory approvals. Our objective has always been to provide our international brands of the highest quality, as alternative choices to the legal aged smokers who have made the choice to continue to smoke.

Recount your experience in Nigeria. What challenges come with the operating environment?

It has definitely been worthwhile. Looking back to the time I started as managing director in Nigeria, precisely in February 2016, I can say we have had a fast learning curve discovering the uniqueness of doing business here. Our experience shows that doing business in Nigeria at this time might not be as difficult as it is being portrayed outside the country, particularly in the media, which has created an erroneous perception of the Nigerian business terrain as a difficult operating environment. With the government’s intervention in addressing the power supply challenges, infrastructure deficiency as well as the recent economic reforms focused on the ease of doing business in Nigeria, the business environment can only get better. From PM’s perspective, the operational and economic outlook is extremely positive and we are here to stay.

What is your investment plan for Nigeria?

The plan is to steadily grow our investment in Nigeria. Since 2015, when we started our operations by taking advantage of the ECOWAS Trade Liberalisation Scheme (ETLS), which enables free movement of goods within West Africa, we have gone from 100 per cent importation of brands from our manufacturing plant in Senegal, to taking the bold step of starting to locally manufacture our brands in Nigeria with our strategic partner, International Tobacco Company Limited (ITC). This goes to show the confidence we have in the Nigerian market and our focus on local manufacturing and other investments will certainly continue.

How does PML manage to impact the operating environment?

Our industry is highly regulated. Philip Morris International (PMI) maintains a global policy of compliance with rules in each market where it operates. So, our best way of impacting our environment is through quality processes and ensuring full compliance to all laws and regulations. For instance, we are very much interested in partnering with different government agencies on jointly fighting illicit trade of cigarettes, to ensure that every pack sold in Nigeria contributes to the tax revenues of the federal government.

How does Nigeria compare with other markets where PMI also does business?

Every market has its peculiarities. For PMI, countries that have signed up to and are guided by the WHO Framework Convention on Tobacco Control (WHO FCTC) resolutions have some unanimity in the treatment of the tobacco industry and this helps to maintain a unified approach in addressing the challenges facing the tobacco industry, such as illicit trade, youth smoking, etc.

Since the enactment of the National Tobacco Control Act, 2015, which has led to the setting up of the National Tobacco Control Committee with a view to ensuring compliance with the law by all stakeholders, there have been a lot of activities within the industry and all players are aware that it is no longer business as usual. We welcome these developments in the hope that they will help the tobacco industry operate within the provisions of the law to the benefit of all stakeholders.

In what areas would you want to see changes?

Regarding the operating environment, it will be nice to see more of an improvement in power supply and quality of infrastructure. On industry specific changes, I would like to see more efforts towards the fight on illicit trade and counterfeit products as this will invariably increase revenue generation for the Government. I am also keenly looking forward to the continued implementation of the Act and other subsidiary legislations with a view to ensuring compliance by all stakeholders.

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