The nation has witnessed an upsurge in retail malls in recent times but industry watchers say the development has its limitations, MAUREEN IHUA-MADUENYI writes
With a growing middle class, rising economic prosperity and changing demographics, retail malls are daily springing up in major cities across the country.
The retail and wholesale trade sector, according to economists, is a leading sector of the nation’s economy and the second largest contributor to the Gross Domestic Product at 17 per cent per annum.
But there are also concerns that with the estimated 200,000 square metres of retail mall space expected in the next two years, the economy may be exposed to low value addition as well as loss of jobs, especially among start-ups.
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According to the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, the agriculture sector, with 22 per cent contribution to GDP, is the only one above the retail and wholesale trade sector; but while shopping malls are indicative of the enormity of the opportunities that exist in the consumer product sector, they could have little multiplier effect on the economy.
Yusuf said, “The major limitation of the sector is the low local value addition and weak multiplier impact on the economy. In virtually every street in the country, including the rural areas, trading activities are preponderant.
“But such malls also pose a major threat to jobs in the retail sector of the economy. The traditional retail outlets or stores cannot stand the competitive strength of the big shopping malls, especially in the cities.
“Traditional retail outlets within three kilometres radius of these shopping malls stand the risk of closing shop because of competitiveness issues.”
Retail centres were prior to the boom considered the exclusive preserve of the rich but in the last few years, with the construction of The Palms and Ikeja City Mall, both in Lagos State, others are springing up in various parts of the country, with international retail stores, including South Africa’s Shoprite, as major tenants and only a handful of local retailers.
“The rapid growth in the number of shopping malls is a reflection of some key features of the Nigerian economy,” Yusuf said.
Wemabod Estates Limited, in partnership with Top Services Limited, a property development and investment company, recently opened the 13,000 square-metre Apapa Mall in Lagos, while other retail malls due for delivery between 2014 and 2016 include the Novare Private Partners of South Africa and RMB Westport 22,000sqm Lekki Mall; the 14,000sqm Osapa Convenience Centre; and the UACN Property Development Company’s 10,000sqm Festival Mall in Festac Town, Lagos.
Others are the Anambra State Government and African Capital Alliance’s 15,000sqm Onitsha Mall; and the Actis and Duval Properties’ 27,000sqm Jabi Lake Mall and Akure Mall, both of which are expected to be completed by 2015.
Abuja is also expected to play host to the 40,000sqm Capital City Mall, a project conceived by the Churchgate Group.
Other big shopping outlets in different parts of the country are the Adeniran Ogunsanya Shopping Mall, which was opened in Lagos a few years ago; the Ado Bayero Mall; the Cocoa Mall, reputed as Oyo State’s largest; Polo Park Mall; Grand Towers Mall and Kwara Mall. The Chairman, Top Services Limited, developers of the Apapa Mall, Mr. Tokunbo Omisore, said mall development would grow the retail industry positively as it would create opportunities. He added that it would also create and grow the Small & Medium Enterprises, as dedicated entrepreneurs can develop products branding nationwide and at continental level if well packaged.
“Mall development is one of the essential or should I say necessary tools to develop our retail industry to the height that the Nigerian government targets,” Omisore, an architect, explained. He, however, said the malls should be affordable so that there would be more local retailers operating from them and the fear of them being counterproductive would be dispelled. The Deputy President, Nigerian Association of Small and Medium Enterprises, South, Prince Orimadegun Agboade, however, said there was no cause for alarm yet.
He stated, “As far as I am concerned, it won’t be an issue for us as entrepreneurs; the development will rather enhance SME products if we can improve on the quality and raise them to the standard that the malls will stock, it will be better for us as small businesses than when we sell on the streets. “We can turn the development into a fortune instead of misfortune by improving on our products to meet standards. If we do, we will be selling at higher prices.” Yusuf stated that while the malls were sources of Foreign Direct Investment, there should be consideration for development issues in the economy.
He said, “The lesson in development economics is that as we shop for foreign investments, we should worry about the value of jobs, quality jobs, linkages within the economy and inputs from the domestic economy, among others.
“These are the major ways in which foreign direct investments can impact the welfare of the citizens. FDIs should not be ends in themselves; they should be means to an end. These are very important development issues we should worry about in the drive for FDIs.”
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