In two weeks, Jumia Group has suspended its e-commerce operations across two nations. A week ago, the e-commerce firm shut its business in Cameroon, a development that dismayed its customers in the Central African state.
The customers and clients of the African brand in Tanzania were also shocked when they found that the company has suspended operation in the East African nation too.
What it means: Jumia has shut down operations in five African countries. They are Gabon, Congo, Rwanda, Tanzania, and Cameroon.
Jumia reportedly suspended operations in Tanzania and the other African countries to focus resources on locations where revenue potential is higher. The company is now concerned with the markets that offer better value rather than merely expanding its operations in countries where purchasing power is low.
Was shutdown expected?
The shutdown in Tanzania didn’t come as a surprise to some, especially Nairametrics, which listed the East African country as the next possible target.
The surprising thing is that the news broke sooner than expected. Also, the manner it happened in the two countries could be attributed to the fact that the company’s workers in both countries were allegedly sacked.
Last week, Jumia, in a statement released after it shut down in Cameroon, said its model of operation wasn’t suitable for the Central African state.
Why Jumia exited Tanzania
In a statement issued on its shutdown in Tanzania, Jumia said it wanted to focus on markets that help it to thrive. One of such markets is Nigeria, which was Jumia first stop in Africa.
In a statement issued and reported by Reuters, stated, “We have to focus our resources on our other markets. It is more important now than ever to put our focus and resources where they can bring the best value and help us thrive.”
But while the e-commerce operation will cease to exist in Tanzania, the company will continue to offer merchants (sellers) and buyers a platform, classified portal, for offline transactions.
Where next for Jumia’s hammer
The question now is, where next?
It is believed that Nigeria, Egypt and South Africa are key revenue drivers of the e-commerce firm but countries like Uganda and Senegal are considered as some of the smaller markets in Jumia’s portfolio. Consequently, as previously reported, the workers in these smaller markets will remain jittery until their market picks.
What this means
In its early days, Jumia took the path of growth, neglecting profit. But this review of resources shows the company is retracing its steps to profitability while sacrificing growth rate or expansion of services across Africa.
The shutdown is an attempt to cut down on its operational cost and losses as it plans to meet its profitability projection by 2022. Jumia’s operating loss increased 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, the company has lost about N362.3 billion ($1 billion).
How does this play for investors?
The continuous shutdown supports the argument that Jumia grew too fast beyond its capabilities. However, this growth has been the unique selling point which investors have found appealing in Jumia.
Nigerian Real Estate and COVID in 19 Slides
Validate investment cases and focus energies on property sectors that are more resistant to shocks.
Nigeria is rapidly approaching an economic crisis as the COVID-19 global pandemic has put the world on lockdown and sent Brent crude oil prices to a 20-year low. Spurred by lower global demand and reliance on oil exports for 90% of its foreign exchange income, Nigeria’s economy and her fragile currency are being pushed to their breaking point.
In this report, we will focus on the impact this pandemic will have on the real estate market in Nigeria. So far, key themes include mass concessions, re-negotiation and restructuring activity, slowed decision making, stretched out project deliveries due to the lockdown and more. After outlining the potential property sector losers, hospitality and retail most especially, alongside potential winners (industrial and healthcare), we discuss the impact of the COVID-19 pandemic on individual property sectors and the direction of rentals, capital markets and more.
Within this uncertain environment, we recommend that market participants including asset owners, real estate service providers and others stress test their businesses at varying levels of reduced income, use the downtime for market research to validate investment cases and focus energies on property sectors that are more resistant to shocks.
Download the report through the link in the header.
IMF appoints Ceda Ogada as new director and secretary of the fund
Before joining the IMF, Ogada worked at the United Nations Conference on Trade and Development.
The International Monetary fund (IMF) has announced the appointment of Mr. Ceda Ogada as the Secretary of the Fund and Director of the Secretary’s Department with effect from September 1, 2020, following the retirement of the former Secretary, Mr Jianhai Lin.
This was disclosed in a press statement by IMF on Wednesday, July 15, 2020.
While making the announcement, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said, “Ceda has outstanding institutional knowledge, strategic and intellectual heft, and people leadership. His unparalleled ability to bring people together, combined with his profound appreciation of the Fund’s institutional history and legal principles, as well as a strong service orientation, will help the Fund to even more effectively serve our member countries in a very challenging economic environment.”
Mr. Ogada joined the IMF’s Legal Department in 1999 and rose through the ranks to become Deputy General Counsel in 2014. During this time, he has worked on virtually all aspects of the Fund’s work, including advising on the governance of the Fund, on country operations, helping to develop Fund policies and implementation guidance, and providing technical assistance to member countries.
According to the statement, ‘’Some of the key projects that he has worked on include the Fund’s enhanced policy to address governance and corruption issues, ensuring the adequacy of the Fund’s lending resources, reforms in lending policy such as the establishment of the Flexible Credit Line (FCL) and the Catastrophe Containment and Relief Trust (CCRT), reviews on surveillance policy and capacity development strategy and transparency, archives and communications policies.’’
The new Secretary of the fund was heavily involved in the work on euro area crisis countries during the global financial crisis. Recently, he has led the Legal Department in promoting good governance and transparency in several countries, together with the use of emergency financing for the COVID-19 crisis.
Before he joined IMF, Mr. Ogada worked at the United Nations Conference on Trade and Development as a legal expert and also before that he was in private legal practice in the United States. He holds a Juris Doctor from Harvard Law School and a B.A. in history from Dartmouth College. Mr. Ogada is a citizen of Kenya.
Just in: Suspended EFCC boss, Ibrahim Magu, finally released from detention
Magu’s lawyer confirmed his release from the custody of the DSS.
The suspended acting Chairman of the Economic and Financial Crime Commission (EFCC) has been released from police custody after about 10 days in detention.
According to a monitored report, this was confirmed by his lawyer, Tosin Ojaomo, who said that the EFCC boss is no longer under custody.
The suspended EFCC boss was invited by the presidential probe panel headed by Ayo Salami, a retired President of the Appeal Court to the Presidential Villa in Abuja on July 6 over allegations bordering on corruption and financial misconduct.
He was later moved to Area 10 Force Criminal Investigation Department (FCID) of the police in Abuja where he has since been detained.
Just earlier today, the Inspector-General of Police, Mohammed Adamu, asked Magu, to direct his bail application to the presidential probe panel.
This was in response to a request by Mr Oluwatosin Ojaomo, Magu’s legal representative, who asked the IGP to grant bail to his client on self-recognisance after the suspended EFCC chief had spent four days in custody.
But in a letter dated July 14, 2020, and addressed to Mr Ojaomo, the IGP said the police force is not investigating and detaining Magu, so, it cannot grant the bail request.
It also advised the lawyer to redirect his request to the chairman of the presidential probe panel for appropriate action.