Investec India Auto Series Expert Speak with Andrew Schultz, SA Strategiest

We hosted Andrew Schultz from our South Africa office yesterday for an on the ground perspective on the Nigerian economy. Andrew expects the near term to remain volatile (dollar crunch, inflation spike) until the general elections (to be held in Feb’23). This shouldn’t hurt demand though, as revenues of FMCG companies reveal resilient demand momentum, and improvement in dollar availability can spur an uptick in demand for imported products (like 2Wers). Long term, implementation of structural reforms such as setting up of oil refineries, increase in finance penetration are important for the Nigerian economy. For 2Wer stocks under our coverage as highlighted in our earlier note (Exports facing speed bump) near-term volumes could be under pressure, but the long-term growth story remains intact.