• Friday, March 29, 2024
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Tenants desert Apapa Mall as decrepit infrastructure, unstable macroeconomic conditions bite

Apapa Mall

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 house 15 shops, while 7 have no occupants downstairs.

Ruff N Tumble- baby cloth merchant-, Cash and Carry-a luxury, clothes, and accessory firm- existed the building two years ago while Ren Money- a loan and investment firms- left last year.

Other retailers that had exited Apapa malls are Samsung/Sports, Bheergz Café, Sunta- a first-class clothing firm- and Homely.

Temitope Johnson, 34, a grocery seller said the reasons retailers and tenants are leaving in droves is because of the bad roads in Apapa that makes it difficult for businesses to thrive.

The menacing gridlock at the Port city has resulted in many companies shutting down while residential apartments have been deserted by wealthy owners who have migrated to other parts of the city. This means that the city is losing higher earned spenders.

In 2018, companies operating under the Dangote Group may have lost over N15 billion as profit foregone, to the Apapa gridlock.

Analysts say seller at malls are beset by low consumer purchasing power and unstable macroeconomic conditions as Nigerians are getting poor in every six minutes.

According to a recent World Bank data, 92.10 percent of Nigerians live at 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, nearly half its population, in extreme poverty; as high inflation environment continues to erode discretionary income.

The unemployment rate is at an all-time high of 23.80 percent as at the third quarter of 2018, while a lot of high ends earners are leaving the country in droves to seek greener pastures in Abroad, leaving the low-end earners who go to malls and buy basic food items. A decade ago, investors were attracted to the Nigerian retail market because of the country’s rising middle class and young population that craved for consumption. The envisaged economic boom resulted in the construction of the first malls in 2004.

Between 2009 and 2015, Nigeria’s retail industry grew rapidly at 40% per year. In that period, a total of 199,600 square meters was added to Nigeria’s retail space—more than 64% of the current total formal retail space. Even though foreign investors backed the first few major mall projects in Nigeria, the boom between 2009 and 2015 was largely powered by local capital, Estate Intel’s report shows. Indigenous investors, including Persianas Investment and UACN Property Development Company (UPDC), have now developed 63% of Nigeria’s existing modern centers.

However, the precipitous drop in the drop crude price in mid-2014 that tipped the country in its first recession in 25 years left Nigeria’s biggest malls sitting half empty as they were unable to access dollars to import goods.

While the adoption of a new foreign exchange policy by the central bank and a rebound in crude price and production helped the country exist a recession in the third quarter of 2017, the economic expansion is lower than a decade ago.

Gross Domestic Product (GDP) expanded to 2.38 percent in the fourth quarter of 2018, but the growth rate of the economy at 7.60 percent.

Nigeria’s inflation rate dropped to 11.31% in February 2019 from 11.37% recorded in January 2019, the National Bureau of Statistics (NBS) has said.

“If the government can speed up road construction in Apapa, commercial activities will pick up and more shoppers will patronize the malls,”said Temitope Johnson.

 

BALA AUGIE