It is no longer news that Shoprite, Africa’s largest retailer has considered a potential divestment from its Nigerian operation.
But the big question is, can the local retailers and manufacturers deal with the unbeatable price equilibrium which Shoprite has maintained in the last 15 years?
Despite the fact that economic and investment experts argue that the greatest impediment to Nigeria’s economic growth and development is due to the activities of multinational companies in the country, it can however be deduced that these companies have provided more services than any other domestic retailer in history. Their place has kept price levels at a very good position over the years and that explains why most Nigerians are happy patronizing them.
In the telecommunications industry, Globacom has become a pain in the ass of many Nigerians. The idea behind the activities of Globacom is to bridge the gap between the two important classes in the society and obviously they have not achieved anything in this regard, and other multinational telecommunications companies are playing the roles in a systematic yet important way.
The backstory is that the South African retailer has been struggling in Nigeria in recent years owing largely to increased competition and government policies such as border closures and local production of consumables. It was reported in April that Shoprite Nigeria lost 8.1% of sales in the H2 of 2019, which was related to the September 2019 xenophobic attacks.
Meanwhile, Shoprite is not the only South African company that has recently announced exit from Nigeria. Mr. Price, another South African Company, would be exiting Nigeria to focus on the South African market. Already, the company has closed 4 out of its 5 retail outlets in Nigeria.
Unfortunately, Nigeria’s ‘difficult’ business environment has been blamed for these major divestments.
What is the way forward?
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