How We’re Tackling Japa Syndrome –NB PLC

Nigerian Breweries (NB) Plc has identified brain drain, otherwise known as Japa syndrome as one of the problems affecting businesses in the country but says it has attractive measures to retain important talent.

NB’s Managing Director/CEO, Hans Essaadi said the firm values its staff and has a policy of continuous world-class training and retraining of its employees locally and also sending them abroad, among other measures, which have helped it to tackle the problem.

Essaadi, who spoke during the firm’s pre-Annual General Meeting, held recently in Lagos, noted that NB often sends its top talents to Germany and other parts of the world to update their skills.

These skills, he explained, help to keep the brewer as the industry’s market leader.

He advised that the “Japa” syndrome be taken seriously, but noted that employees have a right to move their skills abroad, or wherever else they please.

Brain drain from Nigeria, nicknamed Japa (meaning run or to flee in Yoruba) is the exodus of middle-class and highly skilled Nigerians which has been occurring in waves since the last five years.

A 2019 Pew study showed that 45 per cent of adults in Nigeria said they planned to emigrate within five years, the highest of any country surveyed.

In 2021, the United Kingdom granted almost 16,000 “skilled worker” visas to Nigerians.

Essaadi also affirmed the firm’s commitment – as a partly alcoholic beverage and partly non-alcoholic beverage company – to paying its duties and taxes in full.

Nevertheless, the MD decried the Federal Government’s proposed excise duty hike on brewed products, saying it would add to the existing headwinds and would have implications for pricing.

He said: “We believe that especially at this moment in time, this is the wrong thing to do. We are in dialogue with the government to pay fair amounts of tax without overdoing it because ultimately, excise tax increases significantly result in price increases in the market because it is indirectly a tax to consumers. This will lead to higher consumer prices on restricted disposable income which will also lead to less revenue.

“We are one of the businesses that are being confronted with this, but just to call this out that it is important for all of you to understand and for us to continue to have this constructive dialogue with the authorities that excise hikes at this point in time are the wrong thing to do, “he said.

NB’s Finance Director, Bernardus Wessels Boer commented on the firm’s financial performance for the year 2022.

He said: “The Board of Directors has recommended the payment of a total dividend of N13.872 billion (N1.43k per ordinary share of 50k each) to its shareholders. The company had earlier paid in October 2022, an interim dividend of N3.288 billion which translated to 40k per share. The payment of the proposed dividend of N10.584 billion at N1.03k per share will be paid after our next Annual General Meeting, billed to hold on April 26, 2023.

“The company recorded revenues of N550.48 billion for the year ended 31st December 2022, which is a 26% increase from N437.20 billion recorded in the corresponding period in 2021. Profit after Tax for the period under review rose by 8%, moving from N12.93 billion in 2021 to N13.93 billion in 2022.”

He said a breakdown of the results showed that inflation, devaluation of the naira and high energy prices led to a 33 per cent increase in Marketing, Distribution, and Administration expenses (which moved from N123.13 billion in 2021 to N163.60 billion in 2022) and a 22% increase in Cost of Sales (from N276.87billion in 2021 to N337.31 billion)” he added.

He noted that forex loss had a major impact on the company’s profitability in 2022.

“Access to forex has continued to be an issue for Nigerian Breweries. The increase in our trade payables has been driven majorly by outstanding payments to our foreign trade partners as a result of the unavailability of enough forex at the official windows.

“The biggest hit trade partner is IBECOR, a Belgian company (also part of the Heineken group) that supports us in the sourcing and procurement of critical raw and packaging materials required for our operations.”