In the operational and voluntary trading update published by the company Monday (3 August) morning, the South African grocery retailer is considering an outright sale of its operation or selling a majority stake in its Nigerian subsidiary.
Shoprite will be following South African Mr. Price and Opera in discontinuing some or all of their operations in Nigeria.
The company has said it has been approached by potential investors looking to take over its Nigerian operations and will be considering an outright or majority sale of its stake in the Nigerian subsidiary.
Growing economic frailty
Shoprite’s Nigeria exit comes at a time of a growing economic slump in tandem with declining consumer spending.
In 2015, Nigeria entered a recession that cut through all sectors of the economy, particularly the consumer market. 2018 brought saw a recovery, but another slump in 2019 saw some of those gains fall back.
As the economy was finally moving in an upward trajectory, along came COVID-19 that has essentially wiped out all those gains.
Due to the COVID-19 pandemic, several countries have seen their economies slow down or grind to a halt. Despite being one of the largest economies in Africa, the IMF has forecasted the Nigerian economy to shrink by at least 3.4%, but local experts predict that the estimated value is generous.
Poor consumer market growth
Nigeria’s consumer market is rather fragmented and heavily based on the informal sector. Since 2015, Nigeria has not seen consumer market growth.
For large retailers like Shoprite and Mr. Price, a strong middle class is needed. But the Nigerian formal consumer market is insignificant and the now shrinking middle class is unable to push the retailers into the sustainability they need.
“Companies have sometimes been open to subsidising losses for a while with the hopes that they will be at the forefront in the case of an economic recovery, but Nigeria does not have great prospects at the moment. The economy is not growing, unemployment and inflation are high and income has not grown in years.” says Adedayo Bakare, a Lagos-based economist.
The exits from Nigeria by foreign multinationals are not expected to slow down any time soon. A new recession is looming in Q3 of 2020.
“Right now is probably the best time to exit Nigeria as a multinational. Companies that exited Nigeria before 2015 possibly got the best value for their investment,” explains Bakare.
Action from the CBN
But the Central Bank of Nigeria (CBN) already told investors to wait for an orderly exit especially since the CBN no longer has enough FX liquidity to serve everybody.
The company said it has been approached by potential investors willing to take over its Nigerian operations. It said it was considering an outright sale of its operation or selling a majority stake in its Nigerian subsidiary.
It is expected that the CBN will not sell USD until there is a hike in oil prices. At the moment, that future is bleak.
But the CBNs Capital controls to stabilise the economy is putting the country and its investment climate in a state of uncertainty.
“Global indices tracking Nigeria are considering leaving the country especially as Nigeria can’t guarantee capital flows for investors. The FX restrictions mean that more investments might leave because of the foreign exchange restrictions currently in the market. A lot of multinationals report their earnings and profits in dollars and when you look at Nigeria’s abysmal exchange rate, especially in the black market, the investments are not viable,” says Bakare.
By Oluwatosin Adeshokan
The Africa Report
Monday, August 3, 2020
Friday, July 31, 2020
Dubai Crown Prince pays hospital bills of Nigerian mother stranded with quadruplets following CNN report
Dubai's Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum has paid the hospital expenses of a Nigerian mother and her quadruplets stranded in the city with mounting medical bills, according to the hospital.
Suliyat Adulkareem, 29, gave birth to the babies, two boys, and two girls, at the Latifa Hospital for Women and Children on July 1.
They were born prematurely at nearly 31 weeks through an emergency C-section and placed on ventilators at the neonatal intensive care unit, the hospital said in a statement.
However, the family had no medical insurance and racked up more than AED 400,000 (about $108,000) in medical expenses since the quadruplets were born, their father Tijani Abdulkareem told CNN.
The Nigerian community and other nationals in Dubai rallied around them to help raise AED 42,000 (around $11,500) to pay part of the bills.
The Crown Prince stepped in to pay the bills after he came across the initial CNN report highlighting the family's story.
He was moved by their plight and informed his office to assist the family, the hospital said.
'A huge favor'
Abdulkareem told CNN he was shocked by the ruler's generosity, and the couple have decided to name two of their babies after him.
One of the girls will also be called Latifa after the hospital, he said.
"It's just a huge favor, and we are still in shock because we didn't even know how to get the money. I had been sleepless wondering how to pay the bill," Abdulkareem said.
Abdulkareem, a chef at a restaurant in the city, said he was distressed when he discovered his wife was going to have quadruplets.
Latifa hospital CEO Muna Tahlak said the hospital staff are "overwhelmed" that the country's ruler has pledged to cover the full medical bills of the quadruplets who are still being cared for at the health facility.
The babies, two boys and two girls, have gradually been taken off ventilators and two of them now weigh 1.8 kilograms. Doctors expect they will soon be strong enough to go home.
'Unbelievable support'
The couple, who live in Dubai, had planned to have the babies in Nigeria because they could not afford medical insurance but were unable to travel because of the coronavirus air restrictions that prevented commercial flights between the two countries.
Abdulkareem said his wife gave birth nearly two months earlier than her delivery date.
The elated father said the family has received "unbelievable" support from the Nigerian community, and various nationalities which has helped them pay for two months rent for a bigger place to accommodate the quadruplets.
"We have been getting calls from Portuguese and Brazilian nationals in Dubai. People have been trying to reach us. The Nigerian community has been following us every step of the way," Abdulkareem said.
This report has been updated to correct that Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum will pay the couple's medical bills.
By Bukola Adebayo
CNN
Suliyat Adulkareem, 29, gave birth to the babies, two boys, and two girls, at the Latifa Hospital for Women and Children on July 1.
They were born prematurely at nearly 31 weeks through an emergency C-section and placed on ventilators at the neonatal intensive care unit, the hospital said in a statement.
However, the family had no medical insurance and racked up more than AED 400,000 (about $108,000) in medical expenses since the quadruplets were born, their father Tijani Abdulkareem told CNN.
The Nigerian community and other nationals in Dubai rallied around them to help raise AED 42,000 (around $11,500) to pay part of the bills.
The Crown Prince stepped in to pay the bills after he came across the initial CNN report highlighting the family's story.
He was moved by their plight and informed his office to assist the family, the hospital said.
'A huge favor'
Abdulkareem told CNN he was shocked by the ruler's generosity, and the couple have decided to name two of their babies after him.
One of the girls will also be called Latifa after the hospital, he said.
"It's just a huge favor, and we are still in shock because we didn't even know how to get the money. I had been sleepless wondering how to pay the bill," Abdulkareem said.
Abdulkareem, a chef at a restaurant in the city, said he was distressed when he discovered his wife was going to have quadruplets.
Latifa hospital CEO Muna Tahlak said the hospital staff are "overwhelmed" that the country's ruler has pledged to cover the full medical bills of the quadruplets who are still being cared for at the health facility.
The babies, two boys and two girls, have gradually been taken off ventilators and two of them now weigh 1.8 kilograms. Doctors expect they will soon be strong enough to go home.
'Unbelievable support'
The couple, who live in Dubai, had planned to have the babies in Nigeria because they could not afford medical insurance but were unable to travel because of the coronavirus air restrictions that prevented commercial flights between the two countries.
Abdulkareem said his wife gave birth nearly two months earlier than her delivery date.
The elated father said the family has received "unbelievable" support from the Nigerian community, and various nationalities which has helped them pay for two months rent for a bigger place to accommodate the quadruplets.
"We have been getting calls from Portuguese and Brazilian nationals in Dubai. People have been trying to reach us. The Nigerian community has been following us every step of the way," Abdulkareem said.
This report has been updated to correct that Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum will pay the couple's medical bills.
By Bukola Adebayo
CNN
Thursday, July 30, 2020
Nigeria Approves Siemens Loan to Revamp Power Infrastructure
Nigerian President Muhammadu Buhari approved counterpart funding for a deal that will see Siemens AG upgrade the nation’s dilapidated power infrastructure. Nigeria, Africa’s most populous nation, last year contracted the German engineering company to rehabilitate and expand its electricity grid. Only about two-thirds of Nigerians have access to power and that’s plagued by constant blackouts.
Buhari, 76, granted “anticipatory approval” for 18.94 million euros ($22.2 million), or 15% of the cost, as counterpart funding for the project, Finance Minister Zainab Ahmed said. The balance will be provided by Euler Hermes Group SAS, backed by the German government, on concessionary terms with a three-year moratorium, a 12-year repayment period at “an interest rate of Libor-plus 1% to Libor-plus 1% to Libor-plus 1.2%.”
The project will be implemented in three phases to be completed by 2025, when Nigeria estimates its on-grid transmission capacity will reach 25,000 megawatts. The West African nation has an installed capacity of 13,000 megawatts, of which a daily average of only 4,500 megawatts is dispatched to consumers due to a poor transmission and distribution network.
In the first phase the system’s operation capacity will be increased to 7,000 megawatts while reducing the sector’s commercial and collection losses, Siemens said in a statement.
In June, lawmakers halted a hike in electricity tariffs meant to help state-owned traders repay power producers, who had threatened to halt operations. Originally planned for April, the hike was delayed by the electricity regulator over disruptions caused by the coronavirus pandemic.
The World Bank in June approved a $750 million loan for the government to overhaul its power sector. Electricity shortages have an economic cost of around $28 billion, or the equivalent of 2% of Nigeria’s gross economic product, according to the lender.
Bloomberg
Buhari, 76, granted “anticipatory approval” for 18.94 million euros ($22.2 million), or 15% of the cost, as counterpart funding for the project, Finance Minister Zainab Ahmed said. The balance will be provided by Euler Hermes Group SAS, backed by the German government, on concessionary terms with a three-year moratorium, a 12-year repayment period at “an interest rate of Libor-plus 1% to Libor-plus 1% to Libor-plus 1.2%.”
The project will be implemented in three phases to be completed by 2025, when Nigeria estimates its on-grid transmission capacity will reach 25,000 megawatts. The West African nation has an installed capacity of 13,000 megawatts, of which a daily average of only 4,500 megawatts is dispatched to consumers due to a poor transmission and distribution network.
In the first phase the system’s operation capacity will be increased to 7,000 megawatts while reducing the sector’s commercial and collection losses, Siemens said in a statement.
In June, lawmakers halted a hike in electricity tariffs meant to help state-owned traders repay power producers, who had threatened to halt operations. Originally planned for April, the hike was delayed by the electricity regulator over disruptions caused by the coronavirus pandemic.
The World Bank in June approved a $750 million loan for the government to overhaul its power sector. Electricity shortages have an economic cost of around $28 billion, or the equivalent of 2% of Nigeria’s gross economic product, according to the lender.
Bloomberg
Canada and Nigeria working to combat migrant smuggling, human trafficking and irregular migration
The Honourable Marco E. L. Mendicino, Minister of Immigration, Refugees and Citizenship, today reaffirmed Canada's commitment to fighting human trafficking, migrant smuggling, and irregular migration as a series of initiatives were unveiled in Nigeria.
On the eve of the World Day against Trafficking in Persons, Canadian officials joined representatives from the governments of Nigeria and Switzerland as well as international and civil society organizations to launch a series of initiatives to assist the Nigerian government in their efforts to disrupt human trafficking and smuggling operations, as well as irregular migration.
Minister Mendicino noted that Canada is pleased to be partnering with Nigeria on 3 new initiatives to improve migration and border management, supported by the International Organization for Migration (IOM), the United Nations Office on Drugs and Crime (UNODC), and ARK, an international communications company. Each organization will participate in various initiatives being undertaken in Nigeria.
The IOM will continue to roll out the entry and exit border control system, known as the Migration Information and Data Analysis System, at the Abuja and Lagos international airports. This will support Nigeria's ability to protect its borders by managing the flow of travellers into and through its country, while helping it to identify criminal travellers and possible human trafficking and migrant smuggling cases.
UNODC will work with Nigeria to counter human trafficking and migrant smuggling operations by identifying and responding to these criminal activities, through improved data gathering and data analysis techniques.
ARK will use its communication expertise to support Nigeria to enhance its human trafficking and irregular migration deterrence campaigns, through integrating and applying data analysis into its targeted messaging.
This is part of the Government of Canada's commitment to combating human trafficking around the world, which includes investing $4 million over the next 2 years in the initiatives in Nigeria.
Quote
"The partnerships we are announcing today will disrupt human trafficking and migrant smuggling rings, and help to stop those who would prey on some of the world's most vulnerable for their own gain. Canada will continue to work alongside our partners and world leaders in fighting trafficking and smuggling operations to support safe migration, and strengthening data analysis and increasing awareness is a critical component of that."
– The Honourable Marco E. L. Mendicino, P.C., M.P., Minister of Immigration, Refugees and Citizenship
Cision
On the eve of the World Day against Trafficking in Persons, Canadian officials joined representatives from the governments of Nigeria and Switzerland as well as international and civil society organizations to launch a series of initiatives to assist the Nigerian government in their efforts to disrupt human trafficking and smuggling operations, as well as irregular migration.
Minister Mendicino noted that Canada is pleased to be partnering with Nigeria on 3 new initiatives to improve migration and border management, supported by the International Organization for Migration (IOM), the United Nations Office on Drugs and Crime (UNODC), and ARK, an international communications company. Each organization will participate in various initiatives being undertaken in Nigeria.
The IOM will continue to roll out the entry and exit border control system, known as the Migration Information and Data Analysis System, at the Abuja and Lagos international airports. This will support Nigeria's ability to protect its borders by managing the flow of travellers into and through its country, while helping it to identify criminal travellers and possible human trafficking and migrant smuggling cases.
UNODC will work with Nigeria to counter human trafficking and migrant smuggling operations by identifying and responding to these criminal activities, through improved data gathering and data analysis techniques.
ARK will use its communication expertise to support Nigeria to enhance its human trafficking and irregular migration deterrence campaigns, through integrating and applying data analysis into its targeted messaging.
This is part of the Government of Canada's commitment to combating human trafficking around the world, which includes investing $4 million over the next 2 years in the initiatives in Nigeria.
Quote
"The partnerships we are announcing today will disrupt human trafficking and migrant smuggling rings, and help to stop those who would prey on some of the world's most vulnerable for their own gain. Canada will continue to work alongside our partners and world leaders in fighting trafficking and smuggling operations to support safe migration, and strengthening data analysis and increasing awareness is a critical component of that."
– The Honourable Marco E. L. Mendicino, P.C., M.P., Minister of Immigration, Refugees and Citizenship
Cision
Wednesday, July 29, 2020
Nigeria reopens 14 airports as Covid-19 cases rise
Nigeria has re-opened 14 airports months after recording more than 40,000 Covid-19 cases and 858 deaths.
Since the index case on February 27, the country has witnessed a steady rise in infections despite efforts to curtail the spread of the virus, including closure of all airports and a general lockdown.
The Nigeria Centre for Disease Control (NCDC) confirmed an additional 555 cases and two deaths on June 26, lifting total infections to 40,532 and fatalities to 858 from Friday’s figures of 39,977 and 856.
People in the country now averaging more than 500 cases a day have been crossing into and out of states without adhering to protocols.
Aviation minister Hadi Sirika said the airports are open for full domestic operations, hence ministerial approval into and out of them is not required.
“This includes private and charter operations. We will keep you informed on the remaining airports in due course,” he said.
Mr Sirika added that the Murtala Muhammed International Airport, Lagos and Nnamdi Azikiwe International Airport Abuja were approved for domestic operations on July 8.
The other airports are located in Kano, Port Harcourt, Owerri, Maiduguri, Uyo, Kaduna, Yola, Calabar, Sokoto, Birnin Kebbi, Jos and Benin.
MUSLIM FESTIVAL
Meanwhile the spiritual head of Nigerian Muslims and the Sultan of Sokoto, Alhaji Sa’ad Abubakar, directed all worshippers to observe prayers in Juma’at mosques instead of prayer grounds on July 31, 2020 to mark the festival of Eid-al-Kabir.
In a statement, Mr Abubakar called on Muslims to pray for peace, progress and development in the country.
The Nigeria Supreme Council for Islamic Affairs (NSCIA) had declared Friday the 10th day of Zulhijja 1441 AH and the day of Eid –el–Kabir for the year.
By Mohammed Momoh
The East African
Since the index case on February 27, the country has witnessed a steady rise in infections despite efforts to curtail the spread of the virus, including closure of all airports and a general lockdown.
The Nigeria Centre for Disease Control (NCDC) confirmed an additional 555 cases and two deaths on June 26, lifting total infections to 40,532 and fatalities to 858 from Friday’s figures of 39,977 and 856.
People in the country now averaging more than 500 cases a day have been crossing into and out of states without adhering to protocols.
Aviation minister Hadi Sirika said the airports are open for full domestic operations, hence ministerial approval into and out of them is not required.
“This includes private and charter operations. We will keep you informed on the remaining airports in due course,” he said.
Mr Sirika added that the Murtala Muhammed International Airport, Lagos and Nnamdi Azikiwe International Airport Abuja were approved for domestic operations on July 8.
The other airports are located in Kano, Port Harcourt, Owerri, Maiduguri, Uyo, Kaduna, Yola, Calabar, Sokoto, Birnin Kebbi, Jos and Benin.
MUSLIM FESTIVAL
Meanwhile the spiritual head of Nigerian Muslims and the Sultan of Sokoto, Alhaji Sa’ad Abubakar, directed all worshippers to observe prayers in Juma’at mosques instead of prayer grounds on July 31, 2020 to mark the festival of Eid-al-Kabir.
In a statement, Mr Abubakar called on Muslims to pray for peace, progress and development in the country.
The Nigeria Supreme Council for Islamic Affairs (NSCIA) had declared Friday the 10th day of Zulhijja 1441 AH and the day of Eid –el–Kabir for the year.
By Mohammed Momoh
The East African
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