When Jumia Group opened its Cameroon subsidiary in 2014, it promised to make buying items easier for both residents and citizens. But little did it know that providence had another plan for one of African leading e-commerce platforms. Five years on, the group has suspended its e-commerce platform operations in the Central African state after it did same in Gabon, Congo, and Rwanda.
Jumia reportedly shut down in Cameroon as the group believes the operations in the country was not lucrative.
The company’s e-commerce platform consists of its marketplace, which connects sellers with consumers; its logistics service, which enables the shipment and delivery of packages from sellers to consumers; and its payment service, which facilitates transactions among the active participants on its platform in selected markets.
The closure of the company’s operation in Cameroon has left only Jumia Deals operation in the country. Nairametrics confirmed this after visiting the Jumia Cameroon website.
Is Cameroon the problem?
While reacting to the shutdown, Jumia said, “We came to the conclusion that our transactional portal as it is run today is not suitable to the current context in Cameroon.”
[READ MORE: Q3 ’19: Jumia grows revenue by 52%]
Another source told Reuters that Jumia said, “We wanted to see how the business evolved. We can come back, but for now, we’re closing (to have) time to study the market.”
However, the political tension in Cameroon, where citizens have been experiencing uprising for two years, places Jumia in a disadvantageous position. Also, the country’s snail-like economic growth poses a threat to Jumia and other establishments.
In November, the International Monetary Fund (IMF) said economic growth in Cameroon was likely to slow to 3.9% this year from 4.1% in 2018 due to a subdued performance by the country’s non-energy sector. This is expected to affect the purchasing power of Cameroonians.
Jumia’s problem is beyond Cameroon
Jumia’s challenges are not just about the economic situation in Cameroon, as the company has also shut down its subsidiaries in Congo and Gabon. It also stopped operation in Rwanda to focus on QSR. This continuous winding up seems to be supporting the argument that Jumia grew too fast beyond its capabilities. And growth is not the same as profitability which Konga (its Nigerian rival) says it would achieve before Jumia.
The move by Jumia to close its Cameroon subsidiary has been cited as an attempt to cut down on its operational cost as it plans to meet its profitability projection by 2022. Although the company didn’t factor in financial losses despite operating loss increasing by 34.6% from €40.6 million in the third quarter of 2018 to €54.6 million in the third quarter of 2019, since entering the e-commerce business in 2012, it has lost about N362.3 billion ($1 billion).
Jumia as a Group is facing class-action lawsuits in the United States. The group was accused of disclosing misleading information in its favour in order to portray it as a healthy company to investors. The accusations have been taking a toll on Jumia’s stock on the New Yock Stock Exchange (NYSE) where it had opted for an unusual listing of its shares.
Where next? Jumia’s shutdown in Cameroon begs the question, ‘where next?’ The company is scaling back on its e-commerce operation in Africa. This move will leave its workers in Tanzania and Uganda jittery, but this would likely not affect Nigeria, which serves as one of its major revenue drivers. However, the Nigerian operation is not without its own financial issue, as it was also rocked by a $17 million fraud.
South-West Governors say attacks in Lagos were attempts to weaken the region’s economy
South West governors have they described the coordinated attacks in the state as an attempt to weaken the region’s economy.
Governors of the South-West states have pledged their supports to their Lagos State counterpart, as they described the coordinated attacks in the state as an attempt to weaken the region’s economy.
This was disclosed by the Chief Press Secretary of the state, Gboyega Akosile, during the visits of the Governors and the Federal Executive Council members from SouthWest to the public assets and private properties destroyed in last Wednesday’s arson in the state.
He tweeted, “Shock! This was the expression on the faces of the Federal Executive Council (FEC) members from Southwest and Governors as they toured the public assets and private properties destroyed in Wednesday’s coordinated arson in Lagos State.
“The delegation of Governors and Ministers was personally received by Sanwo-Olu at the State House in Marina, where the Lagos helmsman showed them the pictorial evidence of the violence before visiting some of the torched assets.”
At a joint press conference held after the tour, Chairman of Southwest Governors’ Forum and Ondo State Governor, Arakunrin Rotimi Akeredolu, SAN, compared the scenes to a war zone, given the extent of the destruction.
According to him, the violence that resulted from the EndSARS protest left much to be desired, stressing that there was an agenda beyond the youth demonstration against police brutality.
He said, “We are deeply concerned with the ease with which public buildings, utilities, police stations, and investment of our people have been burnt despite the proximity of security agencies in those areas.
Shock! This was the expression on the faces of the Federal Executive Council (FEC) members from Southwest and Governors as they toured the public assets and private properties destroyed in Wednesday's coordinated arson in Lagos State. pic.twitter.com/TahuPIWkcQ
— Gboyega Akosile (@gboyegaakosile) October 25, 2020
What this means: From all indications, it is obvious that the South-West Governors believed that the said attack, which were rumoured to have been carried out by suspected hoodlums, were sponsored by some people to deliberately disorganize the region’s economy.
#EndSARS Protest: 80 BRT buses worth N3.9 billion were destroyed by hoodlums – LASG
The Lagos State Government disclosed that the 84 BRT vehicles destroyed by the hoodlums cost a total of about N3.9 billion.
The Lagos State Government has revealed that 27 of the burnt Bus Rapid Transit (BRT) vehicles in the Oyingbo and Ojodu Berger areas of the state cost $200,000 each, while 57 of them cost $100,000 each, all totaling about N3.9 billion.
This statement was made by the Lagos State Government on Friday, after evaluating the extent of damage made to the Bus Rapid Transit (BRT) vehicles.
What you should know
Few days ago, hoodlums hiding under the cover of #EndSARS protests allegedly attacked and razed the Oyingbo BRT terminal, with several buses burnt. Nairametrics reported that Primero Transport Services Ltd (PRT), the owners of BRT buses said they have lost over N100 million in 6 days due to the #EndSARS protests.
The State’s Commissioner for Information, Mr. Gbenga Omotosho, in an exclusive interview with Punch, disclosed that:
- 23 big BRT buses were razed down, while 57 medium-size BRT buses were affected by the violence, which brings the total of the BRT vehicles destroyed to 80.
- 23 of the 80 BRT buses burnt by the hoodlums were at Ojodu, while the remaining 57 were at the Oyingbo area.
- The big buses cost around $200,000 each, while the medium-size ones cost around $100,000 each.
What they are saying
Mr. Omotosho said, “As I speak, the Governor and some of us are going around the state from one facility to the other. We are also visiting private facilities. Some of the places were the Oregun Vehicle Inspection Service office, the BRT park at Oyingbo, and the terminus at Ojodu Berger.
“I don’t know how they planned it; the hoodlums left the old buses and went for the new ones. The new ones were worth billions of naira.
“However, the cumulative losses incurred by the state are not ready yet. But it will be mind-boggling. It came on a scale beyond belief. We know that the police have apprehended suspects.”
What this means
The vehicles were purchased in dollars; So, the consistent decrease in the value of Naira is expected to edge the cost of these buses up, when denominated in Naira.
The Lagos State Commissioner for Information, Mr Gbenga Omotosho explained that with the current foreign exchange rate, the 80 destroyed BRT buses are now valued at N3.929 billion.
BREAKING: Lagos State reviews curfew again, now from 8pm to 6am
Governor Babjide Sanwo-Olu has once again reviewed the curfew in the state to now commence between 8 pm to 6 am.
The Lagos State Governor, Babajide Sanwo-Olu, has further reviewed the curfew earlier imposed on the state to help contain the large scale violence following the hijacked #EndSARS protests against police brutality and extra-judicial killings. The curfew now starts at 8 pm and ends at 6 am daily.
This is coming 2 days after the Governor had eased the 24-hour curfew to start from 6 pm to 8 am daily.
This disclosure was made by the Lagos State Commissioner for Information and Strategy, Gbenga Omotoso, on Sunday, October 25, 2020.
The Commissioner in his statement said, “The curfew in Lagos State has been reviewed. Restriction time is now 8 pm to 6 am. Lagosians are enjoined to plan their journey times as they go about their lawful businesses. Public schools remain shut till further notice.”
What this means
This new review gives Lagosians an extra 4 hours to go about their daily activities.
What to expect
The Lagos State government will keep on reviewing and relaxing the curfew, as long as the security situation does not spike again.