When Shoprite leaves Nigeria, its assets will most likely be handed over to a Nigerian.
“Discussion is ongoing and at advanced level to dispose their (Shoprite) assets in Nigeria to a local.”
Nze Chidi Duru, who confirmed this has Shoprite as one of his Anchor tenants in GrandTower Apo Mall while his Partners, Novare, are landlords to Shoprite in three other locations in Abuja.
According to Duru: “The impact will be that the ownership of Shoprite in Nigeria will now be in the hands of a local.”
He is however uncertain if the brand name Shoprite will remain unchanged when it reverts to a Nigerian owner.
According to him: “I would like to believe the brand name Shoprite will remain based on the agreement signed between Shoprite and the local and if Shoprite will retain any interest or management control at all. The departure of Shoprite from Nigeria invariably is not good for the economy.”
On why the African grocery store is leaving Nigeria, Nze Duru noted: “It is evidence of the fact that this is a very unstable market.
“The challenge of retailers is compounded by the fact that you are in an environment where you have no control over the value of the local currency.”
He lamented retailers such as Shoprite “are buying in international currencies like dollars, Euro and Pounds and you are selling in local currency and the Naira changes like the Oklahoma weather so you have no control of the end-to-end of your business”.
He called on “decision makers to do something quickly around the Naira and also for the Central bank to begin to act as banker of last resort and not to get involved in the politics of managing currency the way they have been managing the currency”.
On the expected job losses from Shoprite’s exit from Nigeria, Nze Duru said: “It is difficult to compute, note that they have strategically encouraged suppliers in Nigeria they have developed suppliers around snail and fish industries and all that.
“I cannot determine the level of job losses but it will have impact on the economy one of which is job losses”.
Reacting to the development, Professor Uche Uwaleke of Nasarawa State University said: “The exit of Shoprite, or any other foreign business for that matter, ordinarily should be a cause for concern especially for a country like Nigeria that is in dire need of foreign direct investment.
“With particular reference to Shoprite, the big question is: what is the net contribution of the company to the Nigerian economy? Beyond the menial jobs, how many Nigerians are in the employ of the South African firm?”