The multinational retail group announced that it took the decision to discontinue its Nigeria operation “following approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria.”
On Monday, South Africa retail giant, Shoprite, announced the commencement of a formal process to discontinue its operation in Nigeria.
According to the financial statement released Monday, the non-South Africa supermarket operation of the company, excluding Nigeria, contributed a paltry 11.6 per cent to the group sales. Its non-South Africa sales also declined by 1.4 per cent in the year under review. Meanwhile, beyond the reasons given for its planned exit, PREMIUM TIMES analysis of the statement showed that Nigeria’s currency fluctuation concern may not be unconnected to the new development.In its currency disclosure details, Shoprite said unaudited Constant Currency information shows the Supermarkets Non-South African operating segment performance in terms of sales growth, excluding the effect of foreign currency fluctuations.
On the other hand, the Zambian Kwacha and Mozambique Metical recorded positive change in sales, respectively. Earlier in March, the CBN had adjusted the official exchange rate to N360/$ from N307/$ and abolished the N325 and N330 concessionary rates. https://www.premiumtimesng.com/news/headlines/401778-naira-devalued-again-now-n381-to-dollar-official-rate.html, the apex bank governor, recently explained that the bank is making efforts towards a unification of the multiple exchange rates.
Earlier in February of the same year, the company said currency devaluations in markets such as Angola, its biggest operation outside South Africa, and Nigeria, have made it difficult to operate profitably elsewhere on the continent. During the period under review, the company said the Angolan operations managed to repatriate USD67 million which had a positive impact on the cash flow of the Group.
The central bank on August 29, 2018, ordered MTN and the four Nigerian banks to bring $8.1 billion back into Nigeria. The apex bank alleged that the telecoms firm sent the funds abroad in breach of foreign exchange regulations. The development affected shares in MTN which fell nearly a third in Johannesburg stock market after the announcement.
Earlier in the year, the Nigerian government suspended the Secure Anchorage Area contract, describing it as “illegal.
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