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South Africa’s Pick n Pay leaves Nigeria

Published

1 day ago

October 28, 2024

As part of its plan to restructure outside of its home market, South African grocery chain, Pick n Pay, announced on Monday that it would sell its 51% stake in a joint venture, quitting Nigeria.

With a collaboration with A.G. Leventis (Nigeria), the retailer entered the Nigerian market less than five years ago and now operates two locations there.

The company also announced a broader half-year loss, which included greater borrowing expenses and trade losses in its main grocery sector.

In the 26 weeks ending August 25, the nation’s third-largest grocery store recorded a loss of 1.1 billion rand ($62 million) before tax and capital expenses, down from a loss of 837.2 million rand the previous year.

The corporation reported that trading losses in its pick-n-pay business increased 9.1% to 718.9 million rand, mostly as a result of a decline in the gross profit margin.

Nigeria’s inadequate infrastructure is impeding its potential for widespread economic expansion. Foreign companies have started leaving the country lately, and manufacturers are already complaining about the upcoming year.

A report earlier this year predicted that barring a shock to the naira’s appreciation, the drag from rising energy costs would continue past 2024.

Additionally, borrowings might rise due to the combined impact of rising operating and machinery costs in naira that are meant to be paid for with foreign exchange and rising dollar-denominated debts that might see a spike in value when converted to naira.

Related Topics:Featured Nigeria South Africa

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Ghana considers imports from Nigeria’s Dangote oil refinery

Published

4 hours ago

October 29, 2024

Ifeoluwa Dada

The head of Ghana’s oil regulator stated on Monday that once Nigeria’s Dangote Oil Refinery was fully operational, Ghana might purchase petroleum products from the facility, reducing the need for more costly exports from Europe.

Mustapha Abdul-Hamid, the chairman of Ghana’s National Petroleum Authority, stated at the OTL Africa Downstream oil conference in Lagos that this might result in the elimination of $400 million in petroleum imports from Europe each month.

“If the refinery reaches 650,000 bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices,” Hamid said.

The Nigerian billionaire Aliko Dangote constructed the Dangote Oil refinery, which is anticipated to run close to capacity by the end of the year and maybe reach full capacity in the first quarter of 2025, according to analysts.

Hamid claimed that by eliminating freight expenses, buying from Nigeria instead of Europe would result in lower prices for other goods and services. He predicted that African nations would eventually settle on a single currency, which would reduce demand for US dollars.

In the second quarter of 2024, Ghana’s GDP rose 6.9% year over year, primarily due to the robust growth of the extractive industry, which increased demand for petroleum.

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Nigeria secures IFC loan to improve currency financing for local companies

Published

8 hours ago

October 29, 2024

Ifeoluwa Dada

According to a statement released by the Central Bank of Nigeria on Monday, it has inked a deal with the International Finance Corp to reduce foreign exchange risks and increase local currency funding for Nigerian companies.

The statement shows that the World Bank Group member, IFC, wants to “significantly scale up” its financing in Nigeria, with a goal of over $1 billion over the next several years.

Through the agreement, IFC will be able to boost its investments in Nigerian naira currency and manage currency risks in a variety of sectors, including small and medium-sized businesses, housing, energy, infrastructure, agriculture, and the creative industry.

“Many of these sectors require local currency financing, and IFC’s partnership with the (central bank) is a key tool in expanding access,” the statement said.

Throughout 2024, the naira has experienced persistent devaluation, shedding more than half of its value on the official market since the year began.

The currency was trading at N838.95/$1 in January and broke through the N1,500/$1 barrier in February. Following a short bounce in March, it recovered to N1,300.43/$1 before plunging to a record low of N1,660.5/$1 in October.

The naira began the year at N1215 to the dollar in the parallel market and continued to rise until it first fell to an all-time low of N1,880 in February. After recovering to N1,110 in April, the naira maintained its decline, most recently falling below the N1,700 mark.