At the Surulere Shopping Mall, it is easy to mistaken a throng of people pushing their way through stairways as cash-strapped shoppers eager to exercise their spending power. Sadly, most of them are beautifully dressed people in search of exquisite outdoor designs that can create a desirable background for their photos.
“People you see just come here to hang around and the ones hitting Shoprite are buying small basic food items. There are no more queues for bread,” said Amaka Okafor, a 31-year-old owner of a grocery outlet.
Okafor, downcast, said there were days without single patronage of her business. She pointed to some items that had been on the shelves for months and not even a 35 percent discount could do the magic of wooing customers.
The optimism of burgeoning middle class and rising young population that crave for consumption combined with a benign economic environment led to the construction of the first mall in 2009.
Thereafter, there were sprawling malls home to famous high-end brand stores, movie theatres and large supermarket chains, like the South-Africa owned Shoprite, quickly started to pop up.
However, the Nigerian retail industry was dealt a great blow when the precipitous drop in the crude oil price of mid-2014 stoked a severe dollar scarcity that paralyzed business activities.
While the introduction of a new foreign policy by the central bank in 2017 and a rebound in crude oil production and price helped the country exit a recession in the last quarter of 2017, Nigerian companies and household are yet to recover from devaluations.
Nigerians are poorer and they have refused to open their purse strings.
According to a recent World Bank data, 92.10 percent of Nigerians live below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins.
Nigeria with a population of 180 million people has 87 million people has nearly half of its population, in extreme poverty; as high inflation environment continues to erode discretionary income.
Dolapo Omidire, lead researcher at Estate Intel told Quartz Africa that for a developer to leverage the promise of Nigeria’s middle class and get the most bangs for their buck, a smart play would be to switch the focus from building large fancy malls in business districts to smaller sizes.
The mall-going culture has become popular in Nigeria but many people see the large malls as destination spots for a fun day out rather than to shop thus keeping tenant retailers viable.
”If I build a $100 million mall and people are showing up just to take pictures, then it’s a big problem,” said Omidire.
Tenants, who pay rents in foreign currency, will have to pay more because the local currency is unstable and could be weakened intermittently.
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 the expiring lease.
A total of 22 out of the 36 outlets of the two storey malls are empty, and perhaps more worrisome is that only one tenant- Spectranet- occupies a tranquil and deserted top floor that houses 15 shops, while 7 have no occupants downstairs.
Ruff N Tumble- baby cloth merchant-, Cash and Carry-a luxury, clothes, and accessory firm- exited the building two years ago while Ren Money- a loan and investment firms- left last year.
Other retailers that had exited Apapa malls include Samsung/Sports, Bheergz Café, Sunta- a first class clothing firm- and Homely.
BALA AUGIE
