News media is presently abuzz following an announcement by South African retail giants, Shoprite, that it may be pulling operations from Nigeria following poor financial returns in recent months. Shoprite, which broke into the Nigerian space in 2004, is Africa’s biggest supermarket; and, should they ultimately decide to pull the plug from the Nigerian space, Daily Times takes a look at what this could imply for the country.
Unemployment bazaar:Upon making its debut into the Nigerian market 15 years ago, Shoprite has gone on to set up 25 superstores in major cities across the country, with thousands of Nigerians under the employ of the retail giants; and, should they proceed to pull out its operations, would be sending many Nigerians into the already densely packed labour market, already exacerbated by the coronavirus pandemic.
Emergence of Nigerian owned brands:While a surge in unemployment rate is expected should Shoprite make their proposed egress from the country, there could be hope rising for indigenously owned Nigerian superstores to latch on to the vacuum to be left and launch major outlets across the major cities in the country.
Decline in Foreign Direct Investment:While the brewing situation may provide an open season for locally owned brands to fill the vacuum of Shoprite’s exit, Nigeria could suffer a major blow with regard to foreign direct investment in view of the fact that, should a major foreign investor fold up it’s operations, it could be a cautionary tale that Nigeria has become unfeasible for foreign investment.
Spillover effect on affiliate businesses:With the huge success recorded by its various branches across the country, Shoprite has become a veritable affiliate to other minor business enterprises who have greatly benefited from this partnership. This could be a major setback to their many affiliates who will no doubt face grim consequences should the retail giants withdraw their operations.
Decline of Gross National Income:Taxation constitutes a major source of revenue for any economy which expects to attain vibrance and stability. Available statistics suggests significant weakness in Nigeria’s GNI, which is expected to take a major hit should Shoprite make good on the viral rumours sorrounding its resolve to exit the Nigerian space.