Over the past few months and years, Ghana has witnessed the departure of several major international companies that previously provided essential services to Ghanaians. The abrupt closures and cessation of operations by these companies can be attributed to various factors, primarily driven by the challenging economic terrain in the country.
Ghana’s unstable economy, characterized by fluctuating currency values, high inflation rates, and soaring import costs, has prompted many multinational corporations to relocate their operations elsewhere.
The departure of these companies has had a significant impact on job creation, GDP, and tax revenues, while also raising concerns about the country’s economic stability.
Game’s Exit from Ghana
Game, the multinational retail chain, recently closed its branch in Accra Mall in December 2022. The closure was part of parent company Massmart’s strategic adjustments to mitigate losses and streamline operations. Massmart had been facing financial pressures, including narrow profit margins, leading to its decision to divest from several Game stores across Africa. The closure of Game’s branch reflects the challenges faced by retailers in Africa’s evolving market.
Nivea’s Marketing Operations Closure
Nivea, a globally recognized skincare brand, announced the closure of its marketing operations in Ghana in December 2023. The decision was driven by high taxes and the costly nature of operations in Ghana. Nivea emphasized the importance of streamlining operations and prioritizing markets with sustainable growth and profitability.
Jumia Food’s Discontinuation:
Jumia, a prominent e-commerce platform, discontinued its food delivery service, Jumia Food, in December 2023. The decision was based on a comprehensive evaluation of market conditions and economic factors, highlighting the unsustainable nature of the food delivery business. Jumia implemented cost-cutting measures to optimize operational efficiency and financial sustainability.
Unilever Ghana’s Relocation:
Unilever Ghana’s tea production operations were relocated to Nigeria due to concerns about Ghana’s economic state. The move has raised concerns about Ghana’s economic stability and its impact on domestic businesses.
Glovo’s Exit from Ghana:
Glovo, a well-known delivery service provider, announced the cessation of its operations in Ghana starting May 10, 2024. The decision was driven by the need to strengthen its position in other markets and achieve profitability. The exit of Glovo creates opportunities for other players in the local delivery ecosystem.
Dark and Lovely’s Departure:
Dark and Lovely, a renowned haircare brand, withdrew from the Ghanaian market, reflecting shifting market dynamics and increased competition in the beauty industry. The absence of Dark and Lovely creates a gap in the beauty market that may prove challenging to fill for loyal customers.
BIC Pen’s Relocation:
The BIC pen production company relocated its factory from Ghana to Ivory Coast due to economic challenges. Rising costs of doing business, fluctuating currency values, and escalating energy prices made it difficult to sustain operations.
BET365’s Withdrawal:
BET365, a leading online betting company, announced its withdrawal from the Ghanaian market due to an unsustainable tax burden imposed by the Ghanaian government. High taxation rates and regulatory challenges made it financially challenging for the company to continue its operations in Ghana.
The wave of closures and exits by major international companies in Ghana reflects the country’s challenging economic environment. The departure of these companies has impacted job creation, GDP, and tax revenues, raising concerns about Ghana’s economic stability.
As businesses navigate economic uncertainties and changing market conditions, strategic decisions like closures become necessary to ensure long-term sustainability and adaptability. Stakeholders in Ghana’s business landscape must assess the implications of these developments and adjust their strategies accordingly.
