Retailers Chase Reward In Booming But Volatile Africa

Written by Kevin Mwanza

Apr 10, 2014

From Reuters via BusinessDay

Opening a modern supermarket in a city under threat from an Islamist insurgency, with the added uncertainty of wobbly public power supplies, may sound like a retailer’s nightmare.

But what if that city stands on one of the oldest trade crossroads in Africa, offering a major chunk of one of the largest and fastest-growing retail markets on the continent?

Small wonder then that major retail investors like South African grocer Shoprite and Wal-Mart unit Massmart Holdings are opening stores in Nigeria’s second city of Kano, the northern commercial hub of Africa’s No. 1 oil producer and, since Sunday, its largest economy.

“I always want to be bold enough to say, you can’t be in Nigeria without being in Kano,” Massmart Holdings’ Africa Director Mark Turner told Reuters in Johannesburg at the Reuters Africa Summit this week. Nigeria, along with Angola and Kenya, is a strategic target market for the Wal-Mart subsidiary.

Kano is a dusty centuries-old Sahel belt metropolis that once offered gold, salt, slaves, leather and famed indigo-dyed textiles in its teeming markets at the end of an ancient caravan route linking Libya to black Africa south of the Sahara.

Now, amid banner signs proclaiming “lower prices you can trust”, Kano consumers can wheel their carts between shelves replete with commercial brands from across the globe in a brand-new, air-conditioned Shoprite supermarket, anchoring a larger $85 million shopping mall development in the city.

In the coming weeks, Massmart will join Shoprite by opening one of its Game household appliance stores in the same Ado Bayero mall, named after the local Kano emir. The mall is designed to house 85 shops and will be among Nigeria’s biggest.

But the presence of armed and uniformed guards searching vehicles – opening boots, checking the underside for explosives with mirrors – and frisking all shoppers is a sign that this particular mall location faces unusual security challenges.

Despite being 600 km (375 miles) distant from Maiduguri, the epicentre of a bloody five-year insurrection against the Nigerian state waged by Islamist sect Boko Haram mostly in the northeast, Kano has also suffered the insurgency’s impact.