When Shoprite owners announced that they were selling their stake in the Nigerian market, many of us were baffled. Initially misunderstood to mean the South African food retailer was going to close its stores in the country, the development was clarified as a case of investors opting to sell the business to Nigerians in a deal certainly going to be worth several billions of naira. While this clarification offered some relief — at least, there will be no significant job losses, if any at all, and THAT bread will still be around — it was astounding that a supermarket supposedly making good money from Nigeria would exit so suddenly. Imagine MTN or DStv opting to sell off!
Shoprite has become well loved in Nigeria since it started with a single store in Lekki in 2002. In 18 years, it has expanded to 25 outlets across the federation. At a point, states were positioning to give land to mall developers, knowing that Shoprite would be the anchor tenants. I would not be surprised if some governors were re-elected because they “brought” Shoprite to their states. That’s a joke, obviously, but in many state capitals today, Shoprite is the most modern supermarket and the most photo-friendly backdrop they can boast of. Many Nigerians have established an emotional relationship with the retail outlet, so anything that affects Shoprite is bound to generate reactions.
Why are the investors selling their interest? There are a thousand and one reasons — some obvious, some not. The obvious ones affect virtually every foreign-owned or big business in Nigeria: increasing difficulty in accessing foreign exchange, worsened by the multiple rates that distort pricing; the terrible state of things at the ports and the roads to and fro; and the expensive and insecure local logistics (Stears Business estimates that conveying 30 tonnes of goods from New York to Lagos will cost N600,000, while moving them onwards to Taraba can cost up to an additional N1 million). Also, the multiple taxation insanity is afflicting businesses across Nigeria. It is what it is.
Meanwhile, Shoprite owners may not voice it openly, but Nigerians are increasingly becoming hostile to South African interests. Some will see this as reprisal for the xenophobic attacks on Nigerian shop owners in South Africa. Last year, Shoprite outlets were looted in Nigeria in what was supposed to be tit-for-tat, although these stores operate with workforces and suppliers that are overwhelmingly Nigerians. In a sense, Nigerians were losing home and abroad: those in South Africa were being attacked by South African blacks; those working for South African businesses in Nigeria were also being attacked. Nigerians were bound to lose by a heavy margin, home and away.
My initial reaction to the exit plan was that Shoprite would be making a mistake because, even though our current circumstances are difficult and discouraging, they had mastered things over the years and would do well to hold on for a bit longer as the world tries to recover from the COVID-19 pandemic. If I owned Shoprite Nigeria, I would provide for a few more difficult years, assured that when the boom returns, as it surely would, Nigerians would be in their consumption element again. As for the xenophobia, it is not out of control yet, so it is about the management of it. Nevertheless, Nigeria is not a big fry for Shoprite: our 25 stores are roughly 1% of its chain of 2372.
My takes on the Shoprite situation are slightly off-topic, though. One, instead of being worried about foreign investors seemingly losing interest in our market, I am more troubled by the fact that it seems Nigerian entrepreneurs are not pulling their weight in many sectors of the economy. I do not want to name names, but there are many Nigerian-owned supermarkets that were in the game before Shoprite but can barely boast of having added more than one or two outlets in the last 20 years. I am forced to ask: what exactly is the problem? Is it lack of capital? Lack of vision? Lack of imagination? Lack of ambition? Lack of management skills? Or what?
It’s not that I have the answer, or the answers, but I find it very disheartening that Shoprite came to Nigeria and started spreading north and south while our own supermarkets remained stunted. If you ask Nigerian supermarket owners, they will tell you that the “hostile” economic environment hurts retail business, yet a company operating in the same environment enjoyed significant success. What explains that? Some will blame it on capital — that the South Africans had access to a lot of it, while Nigerians don’t. But why are they not able to raise the capital if the projects are truly bankable? Or maybe we are not interested in setting up supermarket chains? Maybe they don’t have the stamina.
To be fair, it is not that Nigerian entrepreneurs are not doing well at all. That would be an exaggeration taken too far. We have plenty success stories. I am just a bit curious why supermarket chains are uncommon here. It is not as if Shoprite manufactures, so we cannot give inability to manufacture as an excuse. The products in the stores are either imported or locally made. What does it take to secure a large space, buy generators and diesel, assemble shelves, acquire deep freezers, refrigerators and tills, contract suppliers, put price tags on the goods, and set the ball rolling? If South Africans can play this big in the sector, why can’t Nigerians?
Two, some Nigerians celebrated Shoprite’s exit, saying that South Africans are taking over our economy and we should chase them away. This is our typical “bad belle” syndrome: we fail to do something well and begin to resent anyone who does. It is the same syndrome behind the new broadcast code. According to Prof Armstrong Idachaba, the acting director-general of the National Broadcast Commission (NBC), the code was designed to “deal with” DStv. We’ve been here before: a Nigerian company once got the same live football broadcast rights on a platter of gold purportedly to break DStv’s “monopoly”. What happened next? The company ended up in the morgue.
It is one thing to use political might to muscle out a company in favour of locals; it is another thing for the locals to have the expertise and capacity to manage their businesses. I would be the first to say there is nothing wrong in encouraging Nigerian companies to play big. I dream of the day Nigerian-owned and Nigerian-managed companies will not only dominate our market but will also play big on the continent, including South Africa, and on the globe. I dream of Nigerian companies drilling the oil. I dream of Nigerian companies building the biggest roads and bridges. Shell and Julius Berger don’t have two heads. But sentiments cannot replace competence and character.
The reality on the ground is that we are not getting many things right. Rather, we are busy begrudging those who do.
I am more worried that things we can do as Nigerians are being done by foreigners and instead of us to take up the challenge, acquire the expertise and compete, we resort to sentiments and a warped sense of nationalism that papers over our inadequacies and lack of imagination. Even if we had unlimited capital, can we really do what Shoprite has done in 18 years in Nigeria? If we can, why don’t we? There are hard questions we have to ask ourselves, disciplines we have to cultivate and skills we have to hone if indeed we want to chase South Africans away.
Let the truth be told: we are sleeping on duty. There are several economic opportunities staring us in the face in Nigeria but we do little or nothing about them. We complain about everything that is not working. We dwell on problems. Foreign companies will come into the same economy and begin to prosper — under the same temperature, humidity and vegetation. Shoprite did not invent the supermarket. They did not bring their own electricity or water. There is something they are getting right and there is something we are getting wrong. We need to reflect on this if we intend to stop grumbling and start growing. These guys are human — they use the toilet like you and me.