Retail chains are bypassing Nigeria, a country where the vast majority of people live in abject poverty, to open new outlets in other Sub-Saharan countries with booming coastal centre and rising disposable income.
France’s Carrefour SA, one of the largest grocers in the world, has opened a new store one of the sprawling shopping malls in Ivory Coast, siting rising consumer confidence and stable macroeconomic environment.
The French grocer, with three supermarkets across Abidjan city, said it plans to open 10 more across Ivory Coast, Kenya, and Senegal as it continues to expand its footprint across Africa.
Because of a preponderance of stores across the country, the demand for new malls are on the rise, as developers are smiling to the bank, while tenants are buoyant since consumers are willing to open their purse string.
The Ivorian economy, estimated at about $40 billion, is the biggest in Francophone West Africa and is expected to expand by 7.5 percent this year, according to the International Monetary Fund.
In 2018, Shoprite Holdings Plc, a South African retail giant, opened its first store in Kenyan, as it is seeking a foothold in East Africa’s largest economy.
A growing economy spurred by copious investment in infrastructure, lower crude price and job creation has underpinned consumer wallets.
Kenya has GDP size of $89 billion while the IMF expects the economy 5.70 percent in 2019.
While some African countries are attracting retailers into their malls on the back of a stable macroeconomic environment, Nigeria, with a GDP size of $492 million, and population of 200 million, has been experiencing an exodus of foreign investors as the economy is increasingly becoming unpredictable.
Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 a day; little wonder the country has overtaken India as the world’s poverty capital.
Unemployment rate is at an all-time high of 23 percent, and to further exacerbate the already anaemic situation of consumers is the incessant fuel hike and devaluation of the currency.
While inflation rate has fallen to a 12 month of 11.22 percent in May, the figure is below the central bank’s target range of 6 perent and 9 percent.
Gross domestic product in Africa’s largest oil producer expanded by 2.01 percent in the three months through March from a year earlier.That compares with 2.4 percent expansion in the fourth quarter. The median estimate of five economists surveyed by Bloomberg was for growth
Because consumers have refused to open their purse spring, tenants are finding it practically difficult to meet their obligations to landlords.
Most malls charge dollar rents—around $55 per square meter monthly—tenants were soon paying more than before given the sharp fall of Nigeria’s naira currency.
A tenant, who is a wife to a publisher of the one of the top Nigeria Newspapers, and who doesn’t want her name mentioned, said that the economic uncertainty served to limit budget of consumers and that most shoppers focus on buying basic goods and have reined on spending on non-essential goods.
”If I build a $100 million mall and people are showing up just to take pictures, then it’s a big problem” said Omidire, in a recent interview with Quartz.
Embattled retailers at the Apapa shopping mall have refused to open their stores while tenants are shrinking their foot sprints more quietly by choosing not to renew expiring lease.
Analysts at Euro Monitor are of the view that the country is expected to record solid value growth, but growth is expected to pick up following the inauguration of a new government, supported by anticipated economic growth and a rise in disposable incomes.
A young technology savvy people that prefer the comfort of a mall to the brink and mortals shops will be a major driver of retail activities.
However, the lack of policy direction and delay in implementing strategic policies by the President Muhammadu led administration have been a prang to economic growth.
For instance, it took the president six months to appoint his cabinet, a habit that has prevented foreign investors from investing their money in Naira assets.
BALA AUGIE
