As OLX shuts down its offices, is it time to ask questions about investment productivity in Nigeria?

Naspers, one of the largest technology investors in the World, announced that it was shutting down its OLX offices in Nigeria yesterday. Other than Nigeria, there are also speculations it will be shutting down its offices in Kenya and Ghana, hinting at a major withdrawal from OLX operations in Africa. Only its South African office will continue operations.

According to reports, the staff in these offices have been informed about this latest development, and would probably be asked to leave in March 2018. Speaking to Nigerian Tech blog Techpoint.ng, OLX Asia, Middle East and Africa CEO Sjoerd Nikkelen confirmed the news.

“We made a difficult but important decision in Nigeria to consolidate our operations between some of our offices internationally. Our marketplace will continue to operate here — uninterrupted — as it has since 2010, and we remain committed to the many people here who use our platform to buy and sell every month. We continue to be focused on constantly innovating to make sure that OLX remains the top classifieds platform in the country.” He told them.

OLX will continue to run in Nigeria, but their operations will be remote. However, that will not be comforting to many employees who will, as from next month, be jobless.

OLX is a global online marketplace operating in many countries around the world. It was launched in Nigeria in 2012, and in 2015, announced that it had over 3 million traders on its platform. Its mother company, Naspers has investments in major African TV media companies like DSTV, GoTV, Multichoice. Its withdrawal of OLX in Nigeria is perhaps indicative of a bigger problem with investments in Nigeria.

The recent acquisition of Konga (by Zinox group), another online marketplace formerly owned by Naspers, was the first indicator of Naspers gradual withdrawal from Nigeria’s e-commerce market. Zinox bought Naspers’ ownership stakes in Konga, which it launched also in 2012 in Nigeria. The two deals, Konga acquisition, and OLX seem to imply that foreign investment in the Nigerian e-commerce ecosystem is not viable, and does not translate to a satisfying Return on Investment for the investors.

It is also indicative of the Nigeria business environment: Konga and OLX join the ranks of Etisalat and Intercontinental Hotel as businesses that have ceased to exist in the country after it pulled out of recession in 2017. The constant anecdote of Nigeria attracting Foreign investors is being dismantled in real time. With reports that more High Net Worth individuals are leaving the country than coming in, perhaps, Nigeria is no more the investment haven we think it is.

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