Walmart Looks to Expand in Africa
The U.S. State Department reports that U.S. trade with sub-Saharan Africa has grown more than 250 percent since 2001 to more than $70 billion in imports and exports. With such growth, it is no wonder that Wal-Mart purchased a majority stake in South African company Massmart in 2011.
Massmart operates more than 350 stores in South Africa and 11 other sub-Saharan countries. It is the largest retailer of general merchandise, liquor, home improvement equipment and wholesaler of basic foods in Africa.
Now Wal-Mart shifts its focus to Kenya as South Africa’s Wal-Mart unit is in talks to take a much anticipated majority stake in supermarket chain Naivas.
According to Megan Murphy, Wal-Mart’s manager for international corporate affairs:
“Massmart’s interest in investing in Kenya is well-known and we have met with several important players in that market, building relationships.”
Naivas considers itself the supermarket of choice in Kenya, boasting superior products and consumer loyalty. Since its inception in 1992, the supermarket chain has experienced steady growth, expanding to most of the major towns throughout the country.
Kenya’s economic growth boasts a new frontier as Wal-Mart’s potential Kenyan acquisition is a clear indicator that U.S. companies may be ready to begin investing in East Africa (a market previously dwarfed by China and India).
With a GDP of $36 billion, Kenya is currently the most developed economy in Eastern Africa and seems to be a firm starting point for this new international relationship.