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Harsh Economy: Sun International Quits Nigeria

Sun International

By Modupe Gbadeyanka

A South African hotel and gaming group Sun International, has announced that it would leave Nigeria due to the dwindling economy.

The company, which manages the Federal Palace Hotel, Lagos, also explained that it was leaving the country because of clashes with regulators.

In January 2016, Sun International was probed by the Economic and Financial Crimes Commission (EFCC), with four of its South African staff detained.

The anti-graft agency had explained that it investigated the company because of its initial investment in the Tourist Company of Nigeria (TCN).

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Announcing its exit from Nigeria on Monday, Sun International said in a statement that, “The Board has decided to exit Nigeria and steps will be taken to achieve this in a manner that does not erode further value.

“Continued setbacks in Nigeria as well as the ongoing shareholder dispute have frustrated all attempts to develop and improve the property.”

Sun International is the latest South African company to clash with Nigerian authorities after telecommunications group MTN was fined for failing to disconnect users with unregistered SIM cards.

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Its decision to leave Nigeria follows food and clothing retailer Woolworths and Tiger Brands, which sold its loss-making Nigerian division to Dangote Industries.

Shares in Sun International were down 0.7 percent by 0855 GMT.

Reporting its results, the company said poor economic conditions and general negative sentiment in its home market of South Africa resulted in revenue growth at casinos of only 0.8 percent at 7 billion rand ($514.78 million).

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“In South Africa, the economic environment remains a serious concern. We do not anticipate any meaningful growth in gaming revenue until there is a recovery in the economy and renewed consumer confidence,” Chief Executive Graeme Stephens said.

The South African Reserve Bank expects economic growth at zero percent this year, due to a severe drought and falling commodity prices.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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