It's a shame really because it will discourage future investors
But the harsh truth is nigeria is probably the worst market in the world to do business, it's either you are selling an essential product or a very cheap product before you can thrive
The cash cow that is diesel alone can close down a business

Rossikk:

I think it's you being ''emotional''. Firstly, common sense should tell you the average Nigerian can NEVER be on a budget of ''a dollar a day'' (ie N150 a day) and yet the streets are not filled with starving kids, ambulances, and aid trucks from UNICEF, Save The Children, Red Cross etc. The average street beggar in Nigeria makes over 150 naira every hour. So who are the ''average Nigerians'' earning 150 Naira a day? Show me them. Where are they?

Just because some western organisation brandishes a figure doesn't mean you need to parrot it thoughtlessly even where it clearly makes no sense. You should have the independence to tell them their figures are garbage. It's not as if you can't analyse the Nigerian economy without using their bogus figures.


The Myth of ''a dollar a day'':

http://www.questia.com/library/1G1-140998449/the-myth-of-living-on-a-dollar-a-day

I totally agree with your point. It's just so usual for many to brandish figures they glean from somewhere else without actually seeking to verify this. Even in Nigerian villages, people don't live on a dollar a day. A dollar a day! Come on!
The average Nigerian, yes average, probably transports himself with more than a dollar d day. And this is adding no other expenses.

Rossikk:

I take it you are the lower class.

silent is the best answer for a nuisance

Nigeria doesn't have a middle-class.. plane and simple.


The lack of a true middle class makes Africa’s future uncertain.

Earlier this week, upmarket retailer Woolworths announced that it would be pulling out of Nigeria, where it had established three stores that focused on selling clothing and general merchandise.

Although Woolworths says that it remains committed to the rest of its Africa business, which involves 59 stores in eleven countries, the closure of the Nigerian business is a discouraging sign. In particular, it seems to me that this decision highlights one of the main problems with building consumer businesses in Africa: its lack of a real middle class.

Now, admittedly, there are a lot of other possible explanations for this decision. In the announcement, for example, Woolworths cited high costs, supply chain problems, and, weirdly, Nigeria’s hot climate as the drivers of its decision to pull the plug on Nigeria, writing, “High rental costs and duties and complex supply chain processes made trading in Nigeria highly challenging. The Nigerian business was unable to sustain a compelling product and value proposition which represents the brand well and meets the needs of the Nigerian customer in a climate that is hot throughout the year.”

These are all good reasons to quit Nigeria. It’s certainly true that moving goods around Nigeria is a major challenge; the country’s road and rail networks are in an advanced state of decay and logistics management is more akin to performing miracles than ensuring smooth just-in-time deliveries. It’s also true that rental costs for store space can be very high, which is mostly a function of the fact that Nigeria has precious little retail space available – the sprawling city of Lagos, with its 5m residents, has just three shopping malls (that’s fewer than Sandton), so finding space to put a store is both tricky and pricey. I’m not sure about the role that the hot climate plays in doing business in Nigeria, but it’s also true that import duties (and, just maybe, bribes and baksheesh) make importing and doing business expensive.

However, all of these things are generally true of all African countries, and Woolworths knew about them going in; they thus shouldn’t be a reason to quit.

Recognising this, observers have looked for alternative reasons for Woolworths’ decision. Commentators have, for example, argued that the problem was branding. Woolworths is not exactly a household name outside of South Africa, and Nigerians had no reason to know that Woolies is an upmarket and desirable place to shop. Indeed, at least one observer said that Nigerians’ major association with the name “Woolworths” was probably the depressing and downmarket UK chain, and not the Martha Stewart-like World of Woolworths that South Africans think of.

But branding problems can be overcome with the right marketing strategy and enough spending. While costs, logistics, marketing woes and the year-round heat may all have played their part in Woolworths’ exit from the Nigerian market (well, maybe not the heat), I think that there is a bigger issue here, and one that makes building upmarket consumer
businesses in Africa a near-impossible
challenge.

Specifically, the problem is this: there is no real middle-class in Africa. This may sound counter-intuitive, especially if you’re read breathless articles about the growth of the middle-class in Africa (including the breathless articles I’ve personally written on the subject), but it’s true. Despite major gains in income, most of the people who are considered middle-class in Africa are not quite what you would think of as middle class.

Yes, they have disposable income, yes, they buy more consumer goods like fridges and microwaves, and yes, they spend more on clothes, eating out, and entertainment.

But while they are certainly an emerging middle class, they are not the same as the middle-class types who make up Woolworths customers, and the customers of giant retailers like Target in the US, and Marks & Spencer in the UK.

A great many businesses in developed economies, and in South Africa, have been built on the basis of there being a large group of people willing to spend generous amounts on creature comforts. Not the super-rich, who spend huge amounts at boutique stores on luxury brands, but people who will pay the premium for Woolies groceries, for meals out at nice places (not chains, or at least, only top-end chains), for better-quality designer jackets that are still a notch below Burberry, and so on. Such customers are scarce in places like Nigeria, which is still sharply divided between the very wealthy, who do their clothes shopping in London, and the emerging middle-class, who buy cheap imported clothes at informal markets.

Businesses targeting the lower end of the consumer spectrum – things like pay-as-you-go cellphone companies, cheap electronics and clothing manufacturers, and low-end fast food chains – are doing very well in Africa. But companies that target the next notch up, like Woolworths, are struggling to find customers.

This is a worry. While the ranks of the super-rich and the emerging middle-class are growing at home and abroad, upper-middle-class customers are growing ever-scarcer.

Unless the way wealth is shared out changes soon, such companies are likely to continue to see tepid growth and depressing long-term prospects.


http://moneyweb.co.za/moneyweb-the-burning-question/woolies-nigeria-fail-points-to-basic-problem-with-

Rossikk:

I think it's you being ''emotional''. Firstly, common sense should tell you the average Nigerian can NEVER be on a budget of ''a dollar a day'' (ie N150 a day) and yet the streets are not filled with starving kids, ambulances, and aid trucks from UNICEF, Save The Children, Red Cross etc. The average street beggar in Nigeria makes over 150 naira every hour. So who are the ''average Nigerians'' earning 150 Naira a day? Show me them. Where are they?

Just because some western organisation brandishes a figure doesn't mean you need to parrot it thoughtlessly even where it clearly makes no sense. You should have the independence to tell them their figures are garbage. It's not as if you can't analyse the Nigerian economy without using their bogus figures.


The Myth of ''a dollar a day'':

http://www.questia.com/library/1G1-140998449/the-myth-of-living-on-a-dollar-a-day

I don't think u get the point, 70% of Nigerian are subsistence farmers, will no disposable income at all. Most people in that country live from hand to mouth, really admirable, but not suited for retailers like woolsworth.

What did they expect..their stuffs too expensive..the rich will rather shop abroad the average Nigerian won't buy at all... Mr price is still very affordable for average niget Hian just that their cloths tend to be common and often not good quality