A Professor of the Capital Market at the Nasarawa State University, Uche Uwaleke, has allayed fears that the proposed exit of Shoprite would have adverse effect on the Nigerian economy.
Uwaleke, who stated this on Monday in Abuja said Nigerians should not lose sleep over the planned exit of the retail outline.
South Africa’s supermarket retailer, on Monday morningannounced plans to exit Nigeria, 15 years after it opened in the West African country.
In a statement released, the company said it is re-evaluating its operating model and has been approached by many investors willing to take over its Nigerian stores. It added that it has decided to initiate a formal process to consider the sale of all or a majority stake in its retail supermarkets in the country.
“Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time,” read the statement.
Since its launch in December 2005, Shoprite has expanded its stores across Nigeria, employing more than 2,000 people, many of whom are Nigerian.
The company has also built relationships with multiple Nigerian suppliers, small businesses, and farmers as a way of supporting local job creation.
Over the years, the company has faced a number of challenges in Nigeria’s tough business climate, including the looting of its stores in response to xenophobic attacks against other African nationals in South Africa.
While noting that Shoprite’s exit should be a cause for concern for the country that is in dire need of foreign direct investment, the former Imo State finance commissioner insisted that Shoprite’s exit would not lead to massive job loss as is being feared.
He said: “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 SA firm?
“Aside the crowding out effect of Shoprite on local competitors, its operations in Nigeria have also contributed to dwindling foreign reserves through imports that serve to satisfy the appetite of wealthy Nigerians for foreign goods,” Uwaleke added.
The Capital Market Academics President opined that what Nigeria needs at the moment “are foreign direct investments in manufacturing, agriculture value chain, Telecoms and IT and not businesses that promote the consumption of foreign goods and perpetually leave us import-dependent.
“Where possible, the company should be bought over by Nigerians.
“As Shoprite is exiting, some other companies are waiting to berth. The right business environment post COVID’19 will bring this about.
“The country’s economic potentials and market size are such that the World cannot ignore,” he added.