The Future of Formal Retail in Sub-Saharan Africa: Brief Review and Opinion

Abstract

As Sub-Saharan Africa economies boomed in the early 90s, formal retail trade grew as well. However, most of the Sub-Saharan economies’ wealth depends on commodity price performance which in turn has impeded the growth of retail sector. The focus on Africa from the major retailers’ perspective has always been short-term. As the challenges continue eroding opportunities, many are re-thinking whether there is hope in the long-term. While there is no heterogeneity, as each country is at a different stage in retail development, challenges of inflation, forex shortages, poor infrastructure development, policy shifts, and general government inefficiencies are not uncommon. Almost 90% of informal trade makes up the retail sector in Sub-Saharan Africa. The informal retail growth, riding on the political support of the governments, is crowding out the formalized retail growth. This work explores the body of existing knowledge on formalized retailing in Sub-Saharan Africa and focuses on how retailing has evolved in Sub-Saharan countries of Nigeria, Angola, South Africa, Zambia, and Malawi. The paper concludes by identifying the retail growth gaps from retail chains and the governments in the Sub-Saharan region. Recommendations for sustainability are highlighted. Future research gaps are equally identified to advance the understanding of formalized retail importance, challenges, and prospects for Sub-Saharan Africa.