Buhari’s Bad Economic Policies Send One More Foreign Company Packing
President Muhammadu Buhari[/caption]
A top South African company, Sun International, is set to close shop in Nigeria due to the dwindling economic crisis ravaging the country under the President Muhammadu Buhari-led government.
The company, which has a 49% stake in Federal Palace Hotel, cited the “challenging economic conditions and regulatory dispute” as part of its reasons to exit Nigeria.
It also lamented its frustration over the continued retention of international passports of five of its staff by the Economic and Financial Crimes Commission (EFCC) after they were earlier detained, discharged and acquitted.
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“Continued setbacks in Nigeria as well as the ongoing shareholder dispute have frustrated all attempts to develop and improve the property,” the hotel said in its 12-month financial statement.
“Five of our staff members who were detained by the Economic and Financial Crimes Commission earlier in the year have still not had their passports returned to them despite no charges being laid against the individuals, the company or Sun International.
“As a result of the current environment and issues facing the company the board has taken the decision to exit our investment in Nigeria.”
“The Federal Palace continues to operate in a difficult environment with the Nigerian economy facing a number of crises including the low oil price, Boko Haram and a weakening naira and it has still not recovered from the significant impact that the Ebola epidemic had on the business.
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“Occupancy at 41.6% was 6.8% below last year with the average room rate up 3.8%. Despite all efforts to keep costs as low as possible EBITDA declined 58%.
“In addition to the problems that the country faces, there are a number of issues specific to the local Nigerian partners in the Federal Palace and these have further exacerbated the problem.
“After much consideration the Board has determined to exit Nigeria and steps will be taken to achieve this in a manner that does not erode further value,” the company added.
Recall that over 14 International Airlines had shutdown operations in Nigeria after citing similar reasons for their exit.
Since Buhari assumed power on 29th May, 2015, it has been from one negative report to another about Nigeria’s economy, even in the international media.
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Recall a recent Bloomberg report which revealed that South Africa had taken over from Nigeria as Africa’s biggest economy.
