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| Nigeria’s minister of trade and investment, Okechi Enelamah |
Ten years ago, Sun International bought 49 percent of the Nigerian Stock Exchange-listed Tourist Company of Nigeria.
The move gave the company a major stake in the prestigious Federal Palace hotel in Victoria Island, Lagos, one of the main hotels used by businessmen traveling to Nigeria’s commercial capital.
Earnings before interest, taxes, depreciation and amortization at the Nigerian operations fell 58 percent in the 12 months through June, Sun said in a statement on Monday, August 22.
Occupancy rates at the property also fell to 42 percent, Bloomberg reports.
Part of the company’s statement read: “The Federal Palace continues to operate in a difficult environment with the Nigerian economy facing a number of crises including the low oil price.
“An ongoing shareholder dispute has frustrated all attempts to develop and improve the property.”
Sun International has now joined a list of South African companies to have left Nigeria due to the economy, tough regulation and rising costs.
Woolworths Holdings Ltd. and Truworths International Ltd has since left.
Earlier this year, the company issued a statement saying it has been drawn into a long-standing family dispute between fellow shareholders in Nigeria.
The family being referred to is the popular and influential Ibru family who are stakeholders in the hotel and has been at loggerheads since the death of their patriarch, Michael Ibru.
Sun workers including South African expatriates, were detained without charges by Nigeria’s Economic and Financial Crime Commission.
The employees have still not had their passports returned to them, while no charges have been laid against them or the company, Sun said in its statement.
In a related development, fourteen (14) airlines have withdrawn their services from Nigeria due to low patronage and the bad economy being experienced in the country.
The airlines are among the 50 that operated the Nigerian routes some months ago. Some of those listed are Spanish-owned Iberia airlines, United Airlines and Air Gambia among others.
Nigerian companies are also feeling the heat. Recently, four major blue-chip Nigerian companies lost as much as N51.86 billion in the first half of 2016 as the economy continues to take a dip.
Nestlé Nigeria Plc, Nigerian Breweries Plc, Dangote Cement Plc and Lafarge Africa all suffered combined profit losses to the tune of N51.86 billion in the first half of the year.
Two months ago, three Nigerian banks cut down on the number of their employees. Skye Bank Plc sacked 175 of its employees, Ecobank sacked 1,040 and Diamond bank fired 200 of its workers.
Last week, South Africa overtook Nigeria as Africa’s biggest economy in dollar terms. The change in status of both countries was attributed to the appreciation of the rand, South Africa’s currency, and the devaluation of the Nigerian naira.
The situation is even made worse by the prediction of renowned economist and businessman, Mr Atedo Peterside that the recession currently experienced in Nigeria will last for a long time.
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