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, Pulse.com.gh lists 6 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.
- BET365 exits due to high taxes
In a surprising turn of events, one of the world's leading online betting companies, BET365, has announced its decision to withdraw from the Ghanaian market.
This move comes as a blow to the country's betting enthusiasts and marks the end of an era for many who have enjoyed the services of this popular international platform.
BET365's decision to exit the Ghanaian market stems from what the company describes as an untenable tax burden imposed by the Ghanaian government.
The high taxation rates, coupled with regulatory challenges, have made it increasingly difficult for the company to operate profitably in the country.
Despite efforts to negotiate with authorities and explore alternative solutions, BET365 ultimately concluded that its continued presence in Ghana was no longer financially viable.
The news of BET365's departure has elicited mixed reactions from stakeholders within the Ghanaian betting industry.
- Nivea shuts down in December 2023
Ghana's skincare industry, Nivea, a globally recognized brand, announced the closure of its marketing line in the country, effective December 2023.
This decision marks the end of an era for Nivea's presence in the Ghanaian market and has prompted reflections on the factors behind the move and its implications for consumers and the skincare sector.
The skincare product closed down due to high taxes and high cost of operation in the country.
The company cited strategic reasons for the move, including the need to streamline its operations and focus on markets where it can achieve sustainable growth and profitability.
- BIC Pen moves out of Ghana
Famous pen production company relocated to Ivory Coast due to the prevailing economic challenges in Ghana.
For decades, the BIC factory had been churning out pens of all colors and sizes, serving the needs of students, professionals, and artists alike. Its products had found their way into classrooms, offices, and homes, leaving a mark on countless lives with every stroke of ink.
However, as the years went by, the landscape began to change. The cost of operations in Ghana soared, driven by factors ranging from fluctuating currency values to rising energy prices.
The once-thriving BIC factory found itself grappling with mounting expenses, making it increasingly challenging to sustain its operations in the face of stiff competition and shrinking profit margins.
As the challenges mounted, the leadership at BIC faced a difficult decision.
- Unilever Ghana relocates its tea production to Nigeria due to current mess
Unilever Ghana factory, a cornerstone of the country's industrial landscape for decades has relocated its tea production to Nigeria due to the current mess of the Ghanaian economy.
The Minority Leader in Parliament, Dr. Cassiel Ato Forson, revealed that the management of the country under President Nana Addo Dankwa Akufo-Addo, the business community's relocation is alarming and should be a cause for worry among Ghanaians.
Ato Forson's remarks underscore the growing apprehension about Ghana's economic stability and its impact on local businesses.
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