As the car moved slowly through the Geri-Alimi intersection in Ilorin, I knew immediately the emirate city had moved past my imagination. It was in the last week of January, almost five years since I left the University of Ilorin. The most significant observation for me came in the erection of new restaurants at almost every major junction across the metropolis–––Stadium Road, General, Taiwo Oke, Taiwo Isale, Unity, Cocacola, Challenge, Post Office, Flower Garden, Fate-Tanke, Sanrab, all the way to Oke-Odo.
It’s restaurants, restaurants… everywhere!
Of course, I found the Quick Service Restaurants proliferation quite fascinating.
First off, there is a sense in which the development speaks to a Nigerian saturation phenomenon: just any relatively lucrative business (or new market) can become overcrowded quite easily in Nigeria, with everyone and their distant cousins scrambling to jump into the fray. This often has lasting effect on such business idea, the market, and, ultimately, growth and sustainability. It’s therefore a no-brainer that soon as the market growth trajectory of such a business stagnates, many would be forced to jump out the same way they must have jumped in.
Yet, on the flipside, a deeper assessment of the blossoming Ilorin QSRs may show us that the industry seems to offer much more than frenzied opportunities—–both for the average Kwaran and the state government.
Last February, the nation’s statistics bureau said in its GDP report that the non-oil sector grew by 1.69% in real terms in Q4 2020, slower than the 2.26% recorded in the corresponding quarter of 2019. For the full year of 2020, the sector grew –1.25% compared to 2.06% in 2019. Aside communications, growth in the sector was driven by agriculture (crop production), real estate, and, most importantly, manufacturing—–under which food, beverage and tobacco rest. In real terms, the sector contributed 94.13% to the nation’s GDP in the fourth quarter of 2020, higher than the share recorded in the fourth quarter of 2019 (92.68%).
Given that Nigeria’s overall growth in that quarter was weak (the nation staggered out of recession within the quarter, having earlier reported two consecutive negative GDP growth in the second and third quarters), and the fact that the food industry was heavily affected by the nationwide lockdown induced by the curtailment of the coronavirus, the output number was quite instructive.
Earlier in 2016, the Association of Fast Food and Confectionary of Nigeria (AFFCON) said the Nigerian fast food industry was worth N250 billion, a quarter of that of the nation’s food industry put at N1 trillion. Four years after, there seems to be no data but if GDP numbers are anything to go by, the plausible reality is that the sector must have grown, and the opportunities must have equally increased, if marginally.
To be sure, Kwara is largely considered a “civil service” state, just like many other states in Nigeria. Apart from limited government jobs and very, very few private positions, there isn’t much in terms of employment opportunities outside of the informal sector.
Last February, the state was listed among those that attracted zero foreign investment in the whole of 2020, according to figures released by the National Bureau of Statistics. The report captured the total Foreign Direct Investment (FDI), portfolio investment and other types of investments into the country in a year the global economy suffered a terrible battering as a result of the coronavirus pandemic.
In many ways, therefore, the blossoming QSR industry could help nourish Kwara’s economy, expand government’s tax net, and provide opportunities for its teeming youth population—–as well as numerous other people lined up along the food and logistics value-chain in Ilorin and beyond.
First, it may be difficult to gauge the effect these restaurants have had on job creation in Kwara in the last three years, especially in the absence of accurate data. But a casual observation around the metropolis shows that quite a number of young people are being employed in these restaurants, at least in the interim. I have equally interacted with a few other young people who moved into Ilorin in anticipation of working at restaurants. With the right incentives, therefore, things could get better and bigger—–including for young entrepreneurs hoping to set up new restaurants in unsaturated spaces within and without the Ilorin metropolis.
Again, during my last visit, I realised that there has been relative improvement in the night life economy of the state. Kwara—–Ilorin especially—–is a deeply conservative society, and this in some ways affects the night economy. But the presence of these restaurants may be changing the dynamics, even if marginally. I noticed that a few pharmacy stores and petty traders may have extended their closing hours since these restaurants sprang up, on the Tanke/Oke-Odo axis especially. With time, this could help open up more windows for entrepreneurs hoping to tap into numerous other opportunities that the evening economy offers, beyond QSR.
One striking feature of these new restaurants in Ilorin is that they are mostly concentrated in the Tanke-Oke-Odo corridor, an area with heavy student population. This is ostensibly because university students form a large chunk of those who eat out. There could be a little trouble when these students go on vacation, and that’s when the innovative skills of the restaurant owners would come to play.
Kwara has easily one of the most efficient internal revenue outfits in the country today, if not the best, and it’s plausible that the state must have captured the operations of these restaurants in its IGR basket. But beyond revenue collection, there is so much the government can do for Ilorin’s blossoming QSR industry to help ease business, provide a window of opportunity for others to be part of the value-chain, generate more revenue, and ultimately help nourish the state’s economy.
The government, to start with, must be deliberate in its desire to integrate local farmers in the state into the blossoming ecosystem. QSRs rely heavily on farm produce which farmers across the state, especially in the northern part, produce. But as I write this, it’s unclear if local farmers across the state actually benefit from the growing QSR industry. For one, Kaiama, the food basket of Kwara State, is almost cut off from modern life. The Ilorin-Kaiama Road is riddled with gullies, narrow and dilapidated bridges, all of which make food supply/logistics a horrifying adventure, as a Daily Trust report showed. Kwara government may lobby with the centre, through its federal representatives, to ensure that these roads are fixed to ease logistics and travels. The same applies to local roads across Kwara North, those within Ilorin, and those linking Kwara Central with Offa and other parts of Kwara South where people live on proceeds of agriculture.
The government can also look into it tax structure, and ensure that cases of multiple taxes (the bane of development of the informal economy) are addressed to encourage productivity.
An equally important step can be taken in the area of logistics. I know a few business ideas birthed around Mobile Food delivery that failed in Ilorin, partly because of logistics concerns. The state is growing and it needs a more robust and organised transport architecture, one that eases transport and numerous other businesses linked to it. Concerns around best practices and regulation are also fundamental, for the overall safety of those who patronize the QSRs.
In the NBS Consumption Expenditure Pattern Report in 2019, Kwara State ranked 26th in the country with a total household expenditure of N668 billion. A breakdown of the data showed that 61.44 per cent of the expenditure went into food.
With the right incentives, the QSR industry can breathe life into Kwara economy and open up new economic frontiers for more people across the state. That way, everyone along the value chain can smile and live happily–––the farmer in Kaiama, the fish vendor in Jebba, the truck driver in Baruten, and the restaurant owner in Ilorin.
Oladeinde writes on the Economy, Investment, Business, and Public Policy. He tweets via @Ola_deinde and can be reached on Olawoyinoladeinde@gmail.com OR +234(70)13363332
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