Nigeria’s ambition to hit 5% GDP growth in 2025 is running into one of its toughest challenges: logistics costs that swallow up as much as three-quarters of a product’s value — nearly ten times the global average.
But global food giant PepsiCo and logistics powerhouse DP World believe they’ve found a way to tackle that obstacle while creating jobs and boosting manufacturing. Their latest move: a $20 million expansion of PepsiCo’s Lagos facility, which now produces Cheetos, one of the world’s most popular snack brands valued at over $1 billion annually.
Launched officially on August 20, 2025, the new plant marks Cheetos’ entry into Nigeria and West Africa, starting with Cheese and Coconut flavours, and a Sour Cream variant set to follow. Beyond snacking, the investment is being positioned as a litmus test for whether foreign partnerships, local sourcing, and streamlined logistics can translate into real economic transformation.
Local Sourcing as Strategy
PepsiCo says almost all ingredients for Nigerian-made Cheetos are locally sourced. Corn grits come from farmers through outgrower schemes, vegetable oil from listed firm Presco Plc, and flavours from domestic suppliers. Only Quaker Oats remain imported due to climate limitations.
“This is not just about snacks; it’s about building resilient supply chains,” said Felix Enwemadu, General Manager, PepsiCo Foods Nigeria. “When you source locally, you cut FX dependence, empower farmers, and create real jobs.”
Logistics: Nigeria’s $100 Billion Bottleneck
For DP World, the partnership is about more than moving goods. With logistics costs in Nigeria among the highest globally, the company is investing in ports, warehouses, road networks, and AI-driven predictive logistics to slash inefficiencies.
“Nigeria handles only 1.6 million containers a year compared to Indonesia’s eight million, despite similar population sizes,” noted Mohammed Akoojee, CEO for sub-Saharan Africa at DP World. “That gap reflects inefficiencies — but also opportunity. AI can help us move faster, price better, and make products more affordable.”
Broader Impact
Government leaders are framing the investment as proof of reforms under President Tinubu. Finance Minister Wale Edun tied the factory directly to policy shifts such as subsidy removal and industrial diversification, arguing that “90% local sourcing means less pressure on FX reserves and more sustainable growth.”
The Lagos State Government echoed the socio-economic benefits, from faster movement of goods to higher inclusion of Nigerian SMEs in global supply chains.
Meanwhile, PepsiCo is highlighting its community footprint, pointing to its Safe Water Access initiative, which has provided clean water to more than 54,000 people and hygiene education to over 800,000 Nigerians since 2022.
A Test Case for Nigeria’s Future
Since first entering Nigeria in 1992, PepsiCo has built a strong presence with Quaker Oats and sausage rolls. With Cheetos now in production, it sees Nigeria as a regional export hub under AfCFTA, supplying a continent of 1.4 billion people.
For Edun, the stakes are clear: “This is how we move from being just a market to being a manufacturing hub. Local production, strong partnerships, and efficient logistics are the building blocks of a trillion-dollar economy.”
Cheetos may be a snack, but the plant that produces it is being pitched as something far bigger: a symbol of Nigeria’s push toward industrialisation, inclusion, and competitiveness on a global scale.
