The presidency has addressed concerns raised about Coca-Cola’s recent announcement to invest $1 billion in Nigeria over the next five years, responding to criticism from Nigerians who viewed the pledge as recycled propaganda.

Following the announcement on Thursday, critics pointed out that the company had previously announced a similar investment plan in 2021.

Responding to the backlash, the presidency explained that the initial pledge was delayed due to challenging economic conditions but has now been renewed under improved circumstances.

Bayo Onanuga, the Special Adviser to the President on Information and Strategy, issued a statement on Thursday addressing the criticism and clarifying the timeline of Coca-Cola’s investment plans. He acknowledged that the $1 billion investment was indeed announced in 2021 but explained that the company was forced to halt the execution of this commitment due to unfavorable business conditions, including the imposition of excise taxes.

“Naysayers and doubters scorned the $1 billion fresh investment pledge in Nigeria made by the company’s global leadership to President Bola Tinubu today in Abuja, saying the company made a similar promise in 2021. Yes, the company made a similar promise three years ago. But it couldn’t fulfil it because of the challenging business environment prevailing in Nigeria then,” Onanuga stated.

He went on to explain that the company’s ability to follow through on its investment pledges depends largely on the economic environment in which it operates.

“As the company’s spokesperson said, while the company made the commitment in 2021, it was also hit by excise taxes,” he said.

The special adviser further explained that the renewed investment commitment is based on the stable and predictable environment fostered by the Tinubu government’s economic stabilization plan. Onanuga reassured Nigerians that the improved conditions have rekindled Coca-Cola’s confidence in Nigeria as a promising market for future investments.

“Our investment pledges are always predicated on a predictable and stable environment. The $1 billion pledge has now been renewed based on the stable environment, which has been promised through the Tinubu government economic stabilization plan,” he explained.

Coca-Cola’s Commitment and Past Investments in Nigeria

While addressing the criticisms, the presidency also highlighted that Coca-Cola and its local partner, the Nigeria Bottling Company, have already invested $1.5 billion in Nigeria over the last decade. This significant capital was channeled toward the expansion of production capacity, supply chain improvements, and logistics.

“The Coca-Cola Company and its local partner, Nigeria Bottling Company, have already invested $1.5 billion in Nigeria over the space of 10 years,” Onanuga noted in his statement.

This figure reflects Coca-Cola’s long-term engagement in the Nigerian market, despite the challenges posed by economic instability and taxation policies. The company’s decision to invest an additional $1 billion over the next five years underscores its confidence in the country’s potential for growth.

Background of The Initial $1 Billion Pledge in 2021

In 2021, Coca-Cola announced its intention to invest $1 billion in Nigeria over a period of five years as part of its strategy to expand its presence in Africa’s most populous nation. However, soon after the announcement, the business environment in Nigeria took a turn for the worse. The country grappled with foreign exchange shortages, rising inflation, and additional excise taxes that negatively affected both local and foreign businesses.

The introduction of new excise duties on beverages added significant cost pressures on companies like Coca-Cola, leading them to reassess their investment plans. Coca-Cola is said to be unable to fully implement its $1 billion investment plan as a result of these new fiscal challenges.

However, according to the presidency, with the recent economic reforms introduced by President Tinubu’s administration, including efforts to stabilize the naira, ease foreign exchange constraints, and attract foreign direct investments (FDI), Coca-Cola has regained confidence in the Nigerian market. This has led to the reaffirmation of its investment plan during the recent visit of Zoran Bogdanovic, the Chief Executive Officer of Coca-Cola Hellenic Bottling Company, to President Tinubu.

During the meeting with President Tinubu, Bogdanovic expressed Coca-Cola’s optimism about Nigeria’s economic future and its long-term commitment to the country. He assured the president of the company’s determination to execute the investment plan over the next five years, provided the business environment remains stable and predictable. According to Bogdanovic, Coca-Cola believes that Nigeria has tremendous potential for growth, and the company is willing to work closely with the government to unlock this potential.

“I am very pleased to announce that, with a predictable and enabling environment in place, we plan to invest an additional $1 billion over the next five years. We believe Nigeria’s potential is tremendous, and we are committed to working with the government to realize this potential,” Bogdanovic stated during his visit to the President.

However, this pledge is coming weeks after Coca-Cola came at odds with the Nigerian regulatory watchdog, the Federal Competition and Consumer Protection Commission (FCCPC), over allegations of misleading trade descriptions and unfair marketing tactics. The FCCPC accused Coca-Cola Nigeria Ltd and its bottling subsidiary, NBC, of misleading consumers by promoting the “Original Taste, Less Sugar” variant as having the same formulation as the original Coca-Cola.

The FCCPC further warned that the company’s alleged abuse of market dominance would be subject to penalties under the Federal Competition and Consumer Protection Act (FCCPA) and the Administrative Penalties Regulation 2020 (APR), with regulatory action expected in the future.

Against this backdrop, many believe that Coca-Cola’s attempt to reintroduce the $1 billion pledge is a clever attempt to curry favor from the government and quell the ongoing probe of its operations in the country.

More fintech startups in Nigeria fail due to “cyberattack & KYC/identity theft” related issues than any other problem. Our data shows that when those attacks happen, most times, the companies die over time, unable to recover from the paralysis. If you google and check recent closures, and ask questions, someone will tell you how some criminals have broken into a startup’s system, took money or distorted the company’s state of equilibrium.

Why this problem? Many people see embedded finance or finance-related APIs as marginal solutions without knowing that once you offer such solutions, you have provided vectors through which people could be hacked, if not protected. In other words, if you offer banking as a service where customers can get bank accounts via your portal, you have provided a path for them to be hacked, if you do not harden the access points. 

Indeed, in your fintech portal, your bank account is linked. A bad actor can initiate withdrawal from that account, and using the same fintech platform move the funds to another account.  Of course, many customers do not know that once they link a  bank account to the platforms, especially ones with “withdrawing” rights, they have extended withdrawing access to their bank accounts. But unfortunately, the portal where that is happening has no decent security protocol.

(Let me use PayPal to explain. Your PayPal account is linked to your bank account. From your PayPal account, you can initiate a deposit from your bank account into your Paypal wallet. If someone has access to your PayPal, that person also has access to your bank account!)

If you check some banks in Nigeria (one issue was reported today), their main bank websites and apps rarely have security failures, but their “fintech” subsidiaries do fail due to hacks. Why? While the Central Bank of Nigeria (CBN)’s security guidelines and regulations are adhered to on the core websites and apps, the fintech subsidiaries are not fully handled in the same way. So, some banks keep losing money due to such failures.

What can you do? One of Tekedia Capital startups wanted to build a fintech component as a marginal feature in its core business. We told the team to freeze the idea, encouraging them to continue to work with their banks’ partners, making it clear that a fintech-focused team should be in place before any voyage into that space.

Yes, that fintech marginal feature should be seen as a core product with every element of security thought-through before customers are allowed to use them.  Do not just get access, embed APIs and expose customers to be burnt without a team with responsibility to ensure that you (not in the finance space) have provided basic security features.

Indeed, embedding a protected and secure product in a porous portal creates vulnerabilities for your business and your customers. And that means you must ensure you are also protected, and secure, before you ask customers to use the solution.