The Nigerian Naira plunged further in value on Monday March 30, as it exchanged at N412 for a dollar following a temporary suspension of sale of forex to the Bureau De Change operators in the country by the Central Bank of Nigeria.
Recall that the apex bank had pegged the exchange rate of the Naira at N380 to the dollar, a move it insisted was not a devaluation of the Nigerian currency.
The CBN however granted the Association of Bureaux De Change Operators of Nigeria its request of going on holiday due to challenges in the local and global economies over the coronavirus pandemic.
While the Naira has crashed in its value due to the low price of crude oil in the international market in recent times, BDC operators have disclosed that there has been a drastic decline in demand for forex due to the impact of coronavirus on the economy. The financial market stakeholders also disclosed that businesses are down and many people are not travelling.
We Are Not Leaving Nigeria, Shoprite Says
Shoprite Nigeria has come out to debunk the story making the rounds that it intends to close shop in Nigeria.
The Country Director for Chastex Consult, Ini Archibong, in a telephone conversation with Vanguard, said: “Shoprite is not leaving Nigeria.”
“We have only just opened to Nigerian investors which we have also been talking to just before now. We are not leaving, who leaves over a $30billion investment and close shop? It doesn’t sound right.”
“We only just given this opportunity to Nigeria investors to come in and also help drive our expansion plan in Nigeria. So we are not leaving.”
“I have tried to say this as too many people as I can. There should be no panic at all and all of that. There is no truth in that report.”
Recall that reports have been circulating that the retail outlet has started a formal process to consider the potential sale of all or a majority of stake in its supermarkets in Nigeria.
The report said the retailer had struggled in the Nigeria market after some South African owned retailer shops exited the Nigeria market.
The report further stated that Shoprite results for the year do not reflect any of their operations in Nigeria as it will be classified as a discontinued operation.
The report also said international markets excluding Nigeria contributed 11.6 per cent to the group sales and reported 1.4 per cent decline in sales from 2018.
Shoprite To Leave Nigeria After 15 Years
South Africa’s grocery retailer Shoprite is leaving Africa’s biggest market, Nigeria, 15 years after it opened shop in the West African country.
The announcement by Shoprite came months after another South African brand, Mr Price, exited the market.
International supermarkets (excluding Nigeria) contributed 11.6% to group sales and reported 1.4% decline in sales from 2018. South African operations contributed 78% of overall sales and saw 8.7% rise for the year.
The company said it has been approached by potential investors willing to take over its Nigerian operations. It said it considering an outright sale of its operation or selling a majority stake in its Nigerian subsidiary.
“As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation,” Shoprite said in a statement on Monday.
In April the supermarket announced it lost 8.1% of its sales in constant currency terms at the end of the second half (H2) of 2019 due to the September xenophobic attacks.
In September, Shoprite stores in Nigeria were vandalised and looted following an alleged xenophobic attack in South Africa, targeting Nigerians.
Owing to fears of further attacks several Shoprite stores across Lagos were sealed and guarded by police.
In the report released in April, the parent company stated that the impact of the store closures and drop in customer count resulted in a difficult half for the company.
Shoprite said the subsequent reduction in customer count during and after the crisis implies that some customers of the supermarkets in Nigeria boycotted the brand.
The difficult half development is not limited to Nigeria alone, as activities in some African nations also created holes in the revenue of Shoprite Holdings, especially the supermarkets out of the shores of South Africa (Non-RSA).
Also, the challenging trading conditions, store closures, load shedding, and currency devaluations in these counties resulted in the company’s furniture division, which includes its Non-RSA business. Due to this, Shoprite’s sale of merchandise dropped by 2.7%, while credit participation increased to 13.7% (2018: 12.5%) of the business’ R3.3 billion sales for the interim period.
However, ShopRite is not the only South African country leaving Nigeria. In June, Mr. Price Group also stated plans to close its Nigerian business to focus on its home market business in South Africa.
The popular affordable clothing, sport, and home wear brand has closed four out of its five Nigerian stores and expects to close the last one in the coming months.
Nigeria is the third country where the company has exited, as it had left Australia and Poland in 2019.
The Durban-based company cited challenges like supply-chain disruptions and challenges in getting funds out of the country as reasons it has struggled to operate in Nigeria.
Why FG Must Stop Banks From Selling Airtime — Okupe
A former presidential aide, Doyin Okupe, has urged the Federal Government to stop banks from selling airtime to mobile phone users in the country.
He stated this in a social media post yesterday.
Through their mobile apps and shortcodes, banks offer customers the opportunity to buy airtime directly to their phones.
But Okupe said that selling of recharge cards/airtime vending is a N10 billion/day business that could employ five million youths, thereby reducing unemployment in the nation.
He wrote, “Government must stop Banks from selling of RECHARGE cards. This business is worth about N10B/day & can provide jobs for 5m youths nationwide and reduce unemployment.
“Banks should not be in the retail business where they strangulate small individual traders. The government must protect MSMEs.”
He noted that a “simple pronouncement” from the Central Bank of Nigeria (CBN) would address the situation.
Okupe further explained that while recharge card selling/airtime vending might not be desirable to many educated youths, a vast majority of illiterate ones could easily tap into the opportunity to sustain themselves instead of resorting to crime.
He added, “Even under capitalism the government still has the responsibility to protect the weak in the society against the strong and mighty.
“Secondly, the banking license does not cover Retail business.
”Any society that is not regulated is close to a jungle where might us right which is undesirable.”
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