Ghana’s economic climate has been a subject of increasing concern both domestically and internationally as several companies announce their exit from the market.
Despite the nation’s wealth of natural resources and relatively stable political environment, a myriad of economic challenges has led to the departure of significant players across various industries.
One of the primary reasons contributing to the exodus of businesses is the volatility of the Ghanaian cedi.
The currency’s depreciation has not only affected profit margins but has also intensified challenges for companies reliant on imports, exacerbating the already high inflation and cost of imports.
In addition to currency woes, Ghana has grappled with energy challenges, exemplified by frequent power outages, locally known as ‘Dumsor,’ and soaring utility costs.
These disruptions have not only hampered production processes but have also driven up operational expenses as companies resort to costly alternatives such as generators.
Amid these economic hurdles, several notable companies have made the decision to cease operations in Ghana, citing various reasons ranging from strategic realignment to untenable operating conditions.
Amid the economic challenges, ekuzoanews.com lists 9 companies that have shut down due to economic hardships.
- Glovo to stop operating in Ghana effective May 10
- Glovo, a popular delivery service provider, has declared its decision to cease operations in Ghana effective Friday, May 10, 2024.
The announcement conveyed through a notice to one of its clients, indicates that Glovo’s official customer app will become inaccessible for orders from that date onwards.
Citing the necessity for an “extended period of time” to fortify its market position and attain profitability, Glovo elucidated the rationale behind its decision. The company has opted to reallocate its resources to bolster operations in the other 23 countries where it maintains a presence.
Despite the discontinuation of services in Ghana, Glovo has assured its clients that any outstanding payments will be settled in accordance with the company’s terms and conditions, albeit within due time.
Glovo’s venture into the Ghanaian market was part of a broader strategic move within Africa. In October 2021, the company invested €25 million ($30 million) to introduce its food delivery services to six African countries, including Ghana.
The Ghanaian launch, which occurred in March 2021, was accompanied by a commitment from Glovo’s Co-Founder, Sacha Michaud, who pledged an investment of 3.5 million euros during the same year.
The decision to discontinue operations in Ghana underscores the competitive landscape and challenges faced by delivery service providers in emerging markets. Glovo’s departure leaves a void in the local delivery ecosystem, prompting speculation about potential opportunities for other players to fill the gap.
As Glovo redirects its focus to other markets, stakeholders in Ghana’s delivery sector are left to assess the implications and adjust their strategies accordingly.
- Jumia shuts down food delivery operations
Jumia, the prominent pan-African e-commerce platform, announced the cessation of its food delivery venture, Jumia Food, effective as of December 2023.
The decision came after a comprehensive evaluation of prevailing market conditions and economic dynamics across its operational territories, which revealed the unsustainable nature of the food delivery business.
Citing the need for strategic realignment, Jumia highlighted that the decision was imperative given the challenges posed by the current economic climate in the regions where Jumia Food operated.
As part of its restructuring efforts, the company disclosed plans to facilitate a smooth transition for employees previously engaged in the food delivery segment.
These employees are expected to be redirected to support the company’s thriving physical goods operations within the affected countries.
The move follows a series of financial setbacks for the firm, including a significant 41 percent year-over-year loss totaling $49.8 million in the fourth quarter (Q4) of 2022.
In response to these challenges, Jumia had previously implemented cost-cutting measures, resulting in the dismissal of over 900 employees, aimed at optimizing operational efficiency and bolstering financial sustainability.
Jumia’s decision to shutter its food delivery operations underscores the complex landscape of e-commerce and food delivery services in Africa, where companies must navigate diverse market dynamics and economic realities.
While the closure of Jumia Food represents a strategic shift for the company, it underscores the imperative for businesses to adapt to evolving market conditions and make strategic decisions to ensure long-term viability and growth.
- GAME – shopping centre in Accra Mall closed down in 2022
Game, the multinational retail chain, shut down its branch located in Accra Mall by December 2022.
This decision follows an earlier declaration by Massmart to close down eight unprofitable stores across Africa.
Despite efforts, the company has yet to secure buyers or investors for its assets, leading to the impending closure.
Game has been a fixture in the Ghanaian retail landscape for over six years, providing shoppers with a wide range of products spanning from household essentials to appliances.
However, the challenges faced by Massmart, Game’s parent company, have necessitated strategic adjustments to mitigate losses and streamline operations.
In 2021, Massmart unveiled plans to divest itself of 14 Game stores across Africa in response to financial pressures, stemming from a narrow half-year profit margin.
Despite ongoing efforts, as of October 5, 2022, the company has struggled to stabilize its financial position amidst volatile market conditions and subdued consumer demand.
The closure of Game’s Accra Mall branch underscores the broader challenges confronting retailers in Africa’s evolving market landscape.
As companies seek to navigate economic uncertainties and shifting consumer preferences, strategic decisions such as store closures become necessary to safeguard long-term sustainability and adapt to changing business environments.
- Dark and Lovely departs from Ghana
In a move that has reverberated throughout the beauty industry in Ghana, Dark and Lovely, a well-known brand specializing in haircare products, has announced its departure from the Ghanaian market.
This decision marks the end of an era for many loyal customers who have relied on Dark and Lovely for their haircare needs over the years.
The news of Dark and Lovely’s exit from Ghana has elicited mixed reactions from consumers and industry observers alike.
For some, it represents a significant loss, as Dark and Lovely has been a trusted brand in the Ghanaian beauty landscape for decades.
Its departure leaves a void that may be challenging to fill for those who have come to rely on its products for their haircare routines.
Dark and Lovely’s decision to exit the Ghanaian market comes amidst a backdrop of shifting market dynamics and increased competition.
The departure of Dark and Lovel served as a poignant reminder of the ever-evolving nature of the beauty industry.
Nivea:
The skincare brand discontinued its operations in Ghana in December 2023, citing high operating costs and taxation as reasons for its departure.
The company’s action was as a result of the need to streamline operations and focus on markets where sustainable growth and profitability can be achieved.
Lipton Tea (Unilever)
In March 2024, Unilever Ghana relocated its tea production operations from Ghana to Nigeria, citing ongoing economic crisis in Ghana.
BET 365
The online betting company withdrew its operations from the Ghanaian market, citing and unsustainable tax burden and regulatory hurdles as reasons for its departure.
BIC
BIC; the popular pen production company moved its operations from Ghana to Ivory Coast in March 2024, citing economic difficulties as the reasons for the relocation.
Societe Generale
The French bank has announced its plans to exit the Ghanaian market after two decades of existence.
The decision is part of a broader withdrawal from several African countries, including Cameroon and Tunisia. Societie Generale’s move follows recent divestments from other African markets and a strategy to focus on markets where it can be a leading