The giant Shoprite retail group announced this week that it is calling time on its Nigerian retail business, bringing to an end the once-bold ambition of making a significant inroad into Africa’s most populous market.
The dream, it seems, has waned on the back of the reality that Nigeria has never really emerged from its 2015-16 recession.
TROUBLED CURRENCY AND RISING CONSUMER PRICES
Its troubled economy is being further hit by low oil prices, the ravages of the pandemic, a currency that has twice devalued this year, rising consumer goods prices that only a diminishing pool of middle class Nigerians can consistently afford to buy, and issues with Nigerian officialdom.There have also been past difficulties caused by xenophobic attacks in South Africa on Nigerian citizens. These translated into retaliatory attacks, looting and open hostility towards Shoprite outlets and staff operating in Nigeria.
Although Shoprite will be divesting itself of all, or a majority stake, of its interests in the country, its Nigerian ambitions haven’t failed for lack of trying. It has spent 15 years in the country and spent much time and effort on improving its supply chain in an effort to ensure consistent product quality, for example.
THERE HAVE BEEN APPROACHES BY MANY INVESTORS
Shoprite said in its latest trading update released to the Johannesburg Stock Exchange that it had been approached by many investors willing to take over its stores.According to the Nigerian newspaper This Day, the Shoprite decision could benefit the country by opening up an opportunity for Nigerian-based entrepreneurs to take over. It would also help to keep much-needed foreign exchange within the country, the newspaper stated.
SPECULATION OVER LIKELY NIGERIAN-BASED BUYERS
It said rumours in the local business community have named moguls such as Aliko Dangote, Peter Obi and Tayo Amusan as having shown interest.But This Day believes that Amusan, who is Chairman of the Persianas retail, residential and commercial property group, is the likely buyer.
Amusan may already have agreed to buy a majority stake and could change the Shoprite trading name to Jarra, the publication speculated.
