Yesterday, The Citizen published a news-report titled ‘Jumia closes Tanzania unit amid drop in share price.’ The closure on November 27, 2019 was announced by the Nigeria-based Jumia Group.
The fact that the closure of business in Tanzania comes ten days after Jumia also closed shop (so to speak) in Cameroon makes interesting reading indeed.
Originally established as the Rocket Internet Company in the Lagos suburb of Yaba in Nigeria in 2013, the company was restyled the Jumia Group – and operates a range of online marketplaces across Africa, retailing in the name and style of Jumia Technologies.
Jumia is a consumer goods e-commerce retail platform that connects sellers with consumers. It’s also a logistics service provider – enabling the shipment and delivery of packages from sellers to consumers – and a payment service, facilitating transactions among participants in selected markets.
We’re told that, as of 2018, the Jumia Group was serving some 1.2 billion consumers and 17 million SMEs across Africa – and boasted 81,000 sellers transacting a deal on its platform every two seconds!
Yet, we’re also told that Jumia’s exit from Tanzania and Cameroon came at a time when it was struggling with losses and a falling stock price. Jumia’s Q-3/2019 loss stood at $55 million, up from $45m in Q-3/2018.
Jumia is the second investor to ‘flee’ Tanzania recently – doing so after the PayPal-backed mobile money lender TALA suspended business last September.
Two issues arise here. One: is the Jumia Group failing in its objective to “build a digital Africa, bringing consumer goods and services to all?” Is it failing in its pledge to “open up new opportunities and horizons to African talents: creating jobs and developing skills on the continent?”
Two: we need to revisit our investment and business environment to ensure that it is not part of the reason(s) for investors to ‘flee’ the country.