Onome Amuge
PepsiCo and DP World have opened a $20 million production facility in Lagos, in a move that executives and government officials said underscored a revival of investor confidence in Africa’s biggest economy.
The factory will produce PepsiCo’s Cheetos brand and is designed to use more than 90 per cent locally sourced raw materials, primarily maize. The partners said the plant would create new jobs, strengthen food security and reinforce Nigeria’s potential as a manufacturing and export hub for West Africa under the African Continental Free Trade Area (AfCFTA).
The investment comes at a time when President Bola Tinubu’s administration is seeking to attract fresh foreign capital after years of policy uncertainty, foreign exchange shortages and double-digit inflation deterred international businesses. Nigeria’s economy, long reliant on crude oil for more than 80 per cent of its foreign exchange earnings, has seen a sharp pullback in multinational investment in recent years, particularly in consumer-facing sectors.
Wale Edun, finance minister and coordinating minister of the economy, said the project reflected the credibility of the government’s reform agenda. “This is not just about two companies. It is about what is possible when global business and Nigerian ambition come together. Our reforms have restored stability, unlocked investment, and are creating the conditions for rapid, inclusive growth,” he said at the launch.
For PepsiCo, the Lagos plant is part of a strategy to deepen its footprint in Africa’s fast-growing consumer markets, where urbanisation and demographics are driving sustained demand for packaged foods. “Nigeria is central to our strategy. This facility reflects our belief in the country’s future and our commitment to sustainable investment,” said Ahmed El-Sheikh, president of PepsiCo’s Middle East, North Africa, Pakistan and Africa (MENAPAK) unit.
DP World, the Dubai-based logistics and infrastructure group, is providing supply chain expertise to integrate the plant into regional and global networks. “Nigeria is a key hub for Africa’s growth. Through this partnership, we are helping to build efficient, resilient supply chains that support long-term development,” said Mohammed Akoojee, chief executive of DP World Sub-Saharan Africa.
The decision to push ahead with the investment contrasts with moves by some peers to scale back their Nigerian operations. In 2023, Unilever announced the divestment of its home care and skin cleansing unit, citing tough market conditions, while Procter & Gamble last year revealed plans to pivot to an import-only model, citing difficulties repatriating capital. Heineken-owned Nigerian Breweries has also battled foreign exchange losses and high energy costs that squeezed profits.
Against this backdrop, PepsiCo and DP World’s investment is being viewed as a test case for Tinubu’s economic reforms, which include the liberalisation of the naira, the removal of fuel subsidies and new incentives for manufacturers. Analysts say the emphasis on local sourcing is significant, as it could help reduce Nigeria’s heavy import bill, ease pressure on dollar reserves and boost incomes for rural farmers.
The Lagos plant adds to a string of recent commitments by multinationals betting on Nigeria’s long-term potential despite short-term macroeconomic volatility. In 2024, Heineken announced a multi-year $85 million capital expenditure plan to modernise its breweries, while Nestlé committed additional resources to boost production capacity in its Agbara plant.
Whether such investments will gather momentum depends heavily on the government’s ability to sustain reforms and stabilise the naira, analysts warn.
For now, the Lagos Cheetos plant is being touted as a symbol of confidence. “This facility is a vote of trust. It shows that Nigeria, with the right reforms and partnerships, can once again become the destination of choice for investment in Africa,”Edun said.
