The Nigerian unit of Heineken NV, the world’s second-largest brewer, had its worst February in 15 years after the central bank drained about 2.1 trillion naira ($4.6 billion) of cash from Africa’s biggest economy.
The Central Bank of Nigeria began replacing old 200-, 500- and 1,000-naira notes with news ones in December, triggering a cash scarcity that’s intensified in recent weeks. Residents have spent hours — often in vain — waiting in ATM queues to withdraw banknotes. Nigerian Breweries Plc, Heineken’s local unit, depends on cash for about 80% of its retail sales, according to Chief Executive Officer Hans Essaadi.
Nigerian Breweries revealed that its business has been heavily impacted by the cash crunch in the country caused by the cashless policy of the Central Bank of Nigeria (CBN).
In an interview with Bloomberg, the Chief Executive Officer (CEO) of the 77-year-old brewery giant, Mr Hans Essaadi, said the development has been a “disaster.”
Last year, the CBN began replacing N200, N500, and N1,000 notes with new ones in December, triggering a cash scarcity that has grown worrisome and led to apprehension and protests in certain cities.
Mr Essaadi, it was gathered, noted that the company has faced a tough challenge as Nigerian Breweries Plc depends on cash for about 80 per cent of its retail sales.
With about 13,000 distributors and sub-distributors as well as about 800,000 outlets, Nigerian Breweries has been one of Nigeria’s foremost brands contributing to the country not just through taxes but also through social and entertainment programmes.
Speaking to the publication in Lagos, the CEO noted that the reason sales may be impacted this quarter is not due to the fact that people don’t want to consume the brands but “because there’s no money.”
“For the average man on the street, it’s a disaster,” he added.
To help ease the worries, Mr Essaadi said Nigerian Breweries plans to help some of its registered outlets to start using point of sale (PoS) devices to encourage electronic payments.
He also expressed optimism at the business scaling the hurdle when the cash situation returns to normal.
“We believe that with the demographics of this country, being the biggest economy in Africa, business will come back,” Mr, Essaadi said.
There are expectations that normalcy will trickle in soon after the Supreme Court last Friday ruled that Nigerians can now spend old notes alongside the new currency notes. The apex court extended the validity of the old N200, N500, and N1,000 naira notes till December 31, stating that the CBN must continue to receive the banknotes from Nigerians.
Leave a Reply