The announcement by Shoprite Holdings Limited, the South African supermarket chain operator, of a formal process to consider the potential sale of all or a majority stake in its Retail Supermarkets Nigeria Limited may be an opporunity for Nigerian investors, the Nigerian Investment Promotion Commission (NIPC) has said.
On Monday, Shoprite in its operational and voluntary trading update for the year ended June 2 said the commencement of the formal share sale process followed approaches from various potential investors.
The Board of the multi-national retail group said in line with its plan to re-evaluate its operating model in Nigeria, it decided to initiate the process to consider the offers from various potential investors in the business.
Shoprite operates 25 outlets in 11 states and the Federal Capital Territory.
The Executive Secretary/CEO of the NIPC, Yewande Sadiku, said on Thursday the announcement by Shoprite Holdings Limited does not in any way imply the closure of Shoprite stores in Nigeria.
The Executive Secretary was speaking during the maiden virtual media parley, “NIPC Meets the Press” in Abuja.
“Although details have not been provided by the Group, we (NIPC) understand that the structure of the planned transaction may provide an opportunity for Nigerian investors to take up a controlling interest in the business. That means expansion and deepening of the investment in Nigeria,” Ms Sadiku said.
She said Shoprite’s outlets across Nigeria provide market access to over 500 Nigerian farmers and small businesses, helping to get local produce and products to millions of Nigerian consumers.
“NIPC considers Shoprite to be a strategic investment in Nigeria that has played a vital role in connecting Nigerian to national and regional value chains.
“We believe that more investments in retail distribution and related sectors, by domestic and foreign investors, are required in Nigeria to deepen the market access of local products and better connect Nigerian businesses, produce and products to national and regional value chains.
“The retail market remains a material growth driver in the Nigerian economy, accounting for 16% of gross domestic product (GDP) and presenting opportunities for domestic and foreign investors in retail stores, e-commerce, real estate and several promising career paths for Nigerians,” she added.
On efforts to progressively improve the Nigerian business environment for both domestic and foreign investors, the Executive Secretary said the NIPC remains committed to its mandate of encouraging, promoting and coordinating investments in Nigeria, in line with the Federal Government’s commitment.
She underlined the importance of strategically pitching Nigeria’s investment prospects on the basis of the competitive advantages of the states and positioning investible sectors and projects, in spite of the ravaging impact of the present global Coronavirus pandemic.
Despite projections from the United Nations Conference on Trade and Development (UNCTAD) and the International Monetary Fund (IMF) that most economies would face economic challenges as a result of the slowdown in foreign direct investment (FDI) flows in 2020/2021, Ms Sadiku said she remained optimistic about the growth of local investors and businesses.
She said the businesses are in a position to take advantage of the unique opportunities presented by COVID-19 pandemic, adding that although many businesses have been negatively impacted by the pandemic, new windows of opportunity have been created for the medical and pharmaceutical, technology-enabled, and ICT sectors to exploit.
During the parley, the Departments of Investment Promotion and States Coordination made presentations on profiling attractive sectors and investment opportunities and provided insights into how investment promotion is undertaken in the States.
The Director of Investment Promotion, Adeshina Emmanuel said the Commission has been profiling various sectors of priority for attracting investments with a view to matchmaking them with investors for specific investment opportunities in selected sectors.
On her part, the Head of Department of States Coordination, Hajja Wakil said the Department which recently updated its database for States now has better access to the appropriate contacts in the States to deliver direct engagements between investors and opportunities across the country.
Responding to a question on Nigeria’s investment agreements, the NIPC CEO spoke on the reform of Nigeria’s international investment agreements, and stressed the need for the media to share in the work that NIPC has done over the last three years.