FDC Whispers – June 20, 2024

Dear Subscriber, 

Beauty is in the eye of the beholder – The Franchise Business Model

In June 2024, the parent company of Guinness Nigeria, Diageo, sold its total interests to Tolaram Group, thereby transitioning from being a manufacturer in Nigeria to being a franchisor. Guinness Nigeria would now be a franchise run by Tolaram Group, like the relationship between Coca-Cola (Franchisor), and Nigeria Bottling Company (Franchisee). Some might view Diageo’s transition from manufacturer to franchisor as a divestment, but it isn’t. Diageo continues its presence in Nigeria as a spirits provider, leveraging its status as one of the world’s largest spirits producers.

In that same lens, the franchise business model allows SMEs and entrepreneurs in Nigeria to leverage the brand name and expertise of successful firms, fostering mutual growth for both franchisors and franchisees. This model can be a catalyst for economic empowerment, enhancing the country’s productivity.

Nigeria’s inflation could be at an inflection point

Headline inflation in Nigeria rose for the 17th consecutive month in May to 33.95%, marking the longest run of increases in the country’s inflation rate. Higher food prices, which make up 50.7% of the consumer price index, continued to drive inflation. However, recent government reforms, including lifting import bans on various food items and suspending import duties on staple foods, could help moderate price increases. These measures, combined with base effects, are expected to ease inflationary pressures in the second half of the year.

In this latest edition of Whispers, the FDC Think Tank takes a deep dive into recent economic developments and their impact on your business and corporate strategy. 

Enjoy your read!