The
recession in Nigeria is taking its toll on businesses and prospects of getting
investors into the country. This is more calamitous considering international investors
in Nigeria are leaving in droves at the moment. The latest of the lot is
South African casino
and hotel operator, Sun International Limited. The company’s earnings in
Nigeria have plunged to an all-time low amid Nigeria’s weakening economy and a
dispute involving its local partners. Ten years ago, Sun International bought
49 percent of the Nigerian Stock Exchange-listed Tourist Company of Nigeria.
The move gave the company a major stake in the prestigious Federal Palace hotel
in Victoria Island, Lagos, one of the main hotels used by businessmen traveling
to Nigeria’s commercial capital. Earnings before interest, taxes, depreciation
and amortization at the Nigerian operations fell 58 percent in the 12 months
through June, Sun said in a statement on Monday, August 22. Sun International
has now joined a list of South African companies to have left Nigeria due to
the economy, tough regulation and rising costs. Woolworths Holdings Ltd. and
Truworths International Ltd have since left.
Similarly,
as much as fourteen airlines have withdrawn their services from Nigeria due to
low patronage and the bad economy. Listed among those affected are Spanish-owned
Iberia airlines, United Airlines and Air Gambia among others. Nigerian
companies are also not left out as Nestlé Nigeria Plc, Nigerian Breweries Plc,
Dangote Cement Plc and Lafarge Africa all suffered combined profit losses to
the tune of N51.86 billion in the first half of the year. Two months ago, three
Nigerian banks cut down on the number of their employees. Skye Bank Plc sacked
175 of its employees, Ecobank sacked 1,040 and Diamond bank fired 200 of its
workers.
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