West Africa’s biggest mall have access restricted

Shoppers coming from Epe, on the Lekki-Epe Express Road, and hoping to access the Novare Lekki Mall, said to be West Africa’s largest retail mall, now have to drive almost half a kilometre down the road before turning back to access the mall. This is following the decision of the Lagos State Government to close the only access to the Mall for those coming to the mall from the Epe axis, as part of its Light Up Lagos project.

Before now, intending shoppers could easily drive into the mall while coming from Epe. Now they have to drive for about half a kilometre before turning back for another kilometre to access the mall. The new more complicated process of accessing the mall has reduced footfall in the mall.

The 28,000-square metre mall with 22,000 gross lettable area was developed by Novare Real Estate Africa at an estimated cost of $83 million direct investment. This investment, according to the developers, transcends financial value as it has, from commencement until date, empowered about 5,000 Nigerians through direct and in-direct employment.

The action of the state government, according to the developers, is unfortunate as it is impacting negatively on the retail facility whose purpose is to provide convenient shopping experience and create jobs for residents of the state, especially those residing in the Ajah and Epe axis of the state.

“We were told that the state government wants to carry out its ‘Light Up Lagos’ project on that road. The state is exercising its sovereign powers and, as responsible corporate citizen, we do not want to join issues with the government,” Fabian Ajogwu, Novare Real Estate Africa’s chairman, told BusinessDay in a phone interview.

Attempts, through phone calls, to reach the Lagos State Commissioner for Energy and Mineral Resources whose ministry, we leant, is handling the Light Up Lagos project, for confirmation, failed as the commissioner would not pick the calls.

But investment analysts say this singular action is not encouraging investment, insisting that government should not be taking actions that seem to be anti-investment or has the capacity to chase investors, especially foreign direct investors, from an economy that desperately needs them to grow.

 This action, according to the analysts, belies the state government’s assurance to investors at the opening of the mall in August 2016 when the governor, Akinwumi Ambode, stressed government’s commitment to increasing inflow of investment and foreign capital through investment-friendly reforms and provision of enabling environment for commerce.

The governor, who was represented at the event by his Special Adviser on Commerce, Benjamin Olabinjo, affirmed that the mall which was funded through foreign direct investment was a testimony of his administration’s drive towards promoting commerce and industry, urging other investors to emulate Novare Real Estate Africa and key into the state’s economic development drive.

Though Lagos as the commercial nerve centre of Nigeria is ahead of other states in terms of economic development, analyst say the state could have been a lot bigger economically if its environment had been more enabling and its policies more encouraging.

“The state should be encouraging the development of more retail facilities because of their  potential to create jobs and promote tourism. Again, the number of malls in Lagos is still a far cry from what it needs as a ‘mega’ city with growing population and fast-paced urbanization”, said an analyst who did not want to be named.

With the rise in middle class population in Nigeria, retail business in the country gained traction and has, between 2009 and date, attracted significant interest from local and international investors who developed modern shopping malls and retail centres similar to those in Europe, America, South Africa and other developed nations.

It has attracted foreign direct investments estimated at $3 billion from a zero base and, apart from accelerating infrastructural development in Nigerian cities, the market also created job opportunities for skilled, semi-skilled and unskilled workers in excess of 1,000 jobs per retail center.

Today, on account of economic realities that have seen job losses and significant drop in consumer spending power, this market is struggling with many developers rescheduling projects delivery timeline and reviewing project size; completed and delivered malls are battling with shallow tenant pool and high vacancy rate which combined impact are discouraging fresh investment in that market.

The analyst noted that the Lagos state government should not add to this problem through such actions as the one that is already affecting patronage and reducing footfall at Novare Lekki Mall. “Retailers are complaining of low patronage and if their concerns are addressed quickly, they may be compelled to close shop”, the analyst said.

The federal government is also guilty of this anti-investment decisions and policies. Michael Ch’udi  Ejekam, the CEO, Atreos (retail investment holding platform), recalled in an interview how at the peak of recession, government turned down  savvy investors who were interested in investing in the  economy because the country has great potential—growing population, great growth, substantial consuming class estimated at 41. 6 percent of the population.

“Government is not encouraging the growth of this business. When some foreign investors want to come in and invest, government was not listening and came up with all manner of regulations. Some of us thought that government should have encouraged them especially when there is scarcity of new investors in the market”, Ejekam stated.