Wine imports

March 24, 2023
  • Nigeria has the capacity to produce locally and save billions of foreign exchange

If the report that Nigerian importers are to spend N244 billion on importation of wine  in 2023 is correct, then it is symptomatic of the prevalence of conspicuous consumption in the country and its influence on our foreign exchange in particular, and the economy as a whole. According to New Telegraph, the money, about $485m, is to be spent on fortified, sparkling and still wine alone. This is huge, considering the fact that wine is only a component of alcoholic drinks consumed by Nigerians. We still have beer and spirits, local and imported, in the mix.

New Telegraph, quoting statistics by Statista, is not done yet. It says the money on wine import into the country would rise to $557.96m in 2024. Wine consumption cost Nigeria $346m during the coronavirus pandemic in 2020; this rose to $417.79m in 2022 before the present $485m estimate. Although the amount spent on wine import in 2021 was not stated, the volume was said to be about 33 million litres, and it is projected that this would rise to about 44.82 million litres by 2027, meaning that volume growth would be  about 3.2 per cent next year.

The United States Department of Agriculture (USDA)’s Global Agricultural Information Network (GAIN), broke the figures down, giving amounts that the country spent on wine from the U.S. ($136.6m), the United Kingdom ($31.1m), Spain ($20.96m), Brazil ($16m) and South Africa (15.7m). These figures were for 2021.

What all of these tell us is that the demand for wines has been on the rise and may continue along that path first because of the increasing middle class and second, the shift by many Nigerians from consumption of other alcoholic drinks like beer, stout and spirits, to wine, which they perceive to be a healthier alcoholic beverage.

But then, if we import more wines because we think it is healthier than other alcoholic beverages, is it healthier to our economy? Certainly not. Because it is not free; it comes at a cost: scarce foreign exchange. Moreover, the importation can only create more export opportunities for the countries from where we import the wines. This means more job opportunities for their peoples while we keep bemoaning unemployment in Nigeria.

Wines of South Africa (WOSA) brings the import vividly home in its revelation that about 3.44million bottles are imported by Nigerian traders yearly. According to it, this was forecast to grow by 12 per cent last year. South Africa is the second biggest exporter of wines, with  about 12 per cent by volume share. We can only imagine the quantum of bottles of wines that Nigerians gulp annually.

Perhaps this would not have been a problem but for the impact of this conspicuous consumption on the country’s scarce foreign exchange. The billions that we splash on wine import could have been saved or diverted to more productive causes. It is just one of the very many ways that Nigeria waste resources. We are so obsessed with everything foreign, from fashion to water, tissue papers to body and hair creams, foods and snacks, alcoholic and non-alcoholic beverages, exotic cars, etc. It is this obsession with everything foreign that has driven our exchange rate to its present N750 to an American Dollar. Yet, it doesn’t seem we are worried. At best, government makes pious statements of concern without taking appropriate measures to check the worrisome trend.

Consumption of wines is by choice and there is nothing wrong with that. What is wrong is when we have to cough up hefty sums to import them. If Nigerians love wines, they must be ready to produce them locally. A situation where we continue to shun the locally produced alcoholic beverages despite the fact that they are cheaper than imported ones is bad for our economy.

This is where the government must come in. We agree that standards must not be sacrificed on the altar of patriotism but the environment should be made for businesses to thrive in the country to encourage local producers and make their products competitive. With regard to wines, we have all it takes to make quality wines in the country. If the government must raise duties on imported wines to discourage their importation, so be it.

In some other countries, like South Africa, wine production is not seen as a big deal. Indeed, it is more of local businesses done in cottages. Yet, the quality compares favourably with imported ones. Nigeria can adopt the same model. What matters is the political will to make it happen.

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