I was in UBA House in a meeting when the CEO dropped a line which shaped how I have seen the playbook of expanding outside Nigeria. Former UBA boss, Kennedy Uzoka, had noted that UBA Africa (UBA operations outside Nigeria but within Africa) was a money maker. Today, we’re learning that 84% of Access Bank* profit comes from its offshore operations: “Nigeria’s largest bank by total assets, Access Bank, raked in N123.9 billion in profits from its foreign operations in the first 9 months of 2022 as the bank’s aggressive investments outside Nigeria continue to pay off.”
Indeed, excluding South Africa, within sub-Saharan Africa, Nigeria is the most competitive market. And because of that competition, companies do not have the freedom to pack gross margins anyhow without the risk of losing customers. But when you move outside Nigeria, the quasi-blue ocean becomes evident. More so, the costs of doing business in some of those countries are lower (no diesel generator, etc) and you can keep most of what you make.
Good People, what is your growth strategy outside Nigeria? Has it ever occurred to you that in Senegal, through a solid partnership, you can outperform whatever you are doing in Nigeria? Most of these economies are still in their infancy levels, and margins are super-high.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Indeed, if the banks think profits abound outside Nigeria, trust that data. Access Bank* possibly has less than 20% of its workforce outside Nigeria, but is picking 84% of profit from those. Think outside Nigeria and expand that business offshore.
Ghana leads the pack: Apart from Access Bank Guinea and South Africa, all the bank’s foreign operations reported a pre-tax profit with Ghana reporting the highest at about N31.6 billion.
-
This compares to the N34.1 billion pre-tax profits reported in Ghana for the whole of 2021.
-
The UK operations also did very well in the first 9 months of this year reporting N22 billion compared to N22.6 billion reported in the whole of 2021.
- Access Bank Ghana’s operations are the largest outside Nigeria with about 52 branches as of 2021.
---
Register for Tekedia Mini-MBA (Jun 3 - Sep 2, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.
I do think that the exchange rate also favours these companies foreign missions, in addition to lesser hassle than in-country. Nigeria is yet to attain the ultimate power status it’s destined for, and once productivity grows and scales, many citizens of African countries will migrate to Nigeria.
This sleeping giant must wake up soonest, because it has an unrivaled responsibility for its citizens and the continent.
From Nigeria for Africa.
Our company tried this playbook of Pan African expansion in our post Covid strategy. We did it with fear, now we are in 10 African countries. We recently moved our HQ to Zambia as a gate way to the Southern Africa environment.
I must tell you , the money is sweet and creating Jobs just make this fulfilling. In fact we currently help African business expand in those countries so they dont fall victim of regulation.
Last month we opened our first Francophone office in Senegal . Doing business in Africa in Makes you love Business of doing business .
I actually plan a document our Journey for people to follow.