Exit of foreign companies from Uganda

Exit of foreign companies from Uganda

A man walks past Shoprite and Game Stores in Lugogo. analysts believe, brands such as Shoprite could no longer put up with the losses, with subsidiaries such as Uganda, depending on the parent company in South Africa. PHOTO/RACHEL MABALA Folding operations. Large brands such as retail chains including Shoprite and Game Stores, and telecom firm Africell, will leave Uganda, citing shrinking sales, low returns and slow growth.

The post Covid-19 era is going to be a very difficult period for many business. Some will fall off while others will fight to the end.

Make no mistake, Covid-19 has hit every business. In fact, it has accelerated the collapse of a large portion while exposing others to cave in to vulnerabilities that they would easily shake off.

But beyond Covid-19 is a serious challenge that government must examine and think of long-term solutions to enhance business resilience even in the face serious volatility.

In the last 10 years, a number of big brands including British Airways, Vodacom, Barclays and Etihad Airline, among others, have left Uganda.

Of these, some, such as Barclays and British Airways had fought through decades, banking on growth projections and prospects.

However, the numbers at the time of their exit, were not making sense thus choosing to cut short their losses.

In analysing the current business environment, we need to focus a little away from what has been happening lately.

Perhaps that is how we shall understand after which we can seek solutions or put to account those in charge.

Rightly, the last few weeks have been difficult for the Ugandan economy.

Large brands such as retail chains including Shoprite and Game Stores, and telecom company, Africell, have announced their intention to leave Uganda, citing shrinking sales and returns or slow growth.Others, including Pep Stores, Tuskys, Uchumi, Nandos and Nakumatt, among others, had seen it sufficient to leave earlier, which signals a problem beyond Covid-19.Indeed, economist Fred Muhumuza concedes to this and notes that the problem started away back, but could have been accelerated by Covid 19.“Covid-19 found us already in trouble. Businesses had been exiting before Covid-19. Certainly, it has accelerated the exits and could continue to affect more businesses both local and international brands,” he says. Economy has slowed In the last five years, experts have previously argued, the economy has been growing below potential, falling below moderate targets set by official data.The below target growth, some argue, has largely been because of bulky […]

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