Shoprite's exit reflects problems in Africa's investment climate that extend beyond retail. (Wikimedia Commons)
Malawi has become the latest casualty in what analysts described as the most significant retail retreat in modern African history after the Competition and Fair-Trading Commission’s approval of five Shoprite stores to Karson Investment Trust.
Commissioners approved the transfer on 12 September, sealing the fate of 25 years of retail history.
Hundreds of workers now face uncertain futures with Karson Investment Trust assuming control of stores in Lilongwe, Blantyre and Limbe.
“This is another setback,” said Charles Kumchenga, the president of the Malawi Congress of Trade Unions.
The Competition and Fair-Trading Commission’s approval of the Shoprite deal came with stringent conditions, including that Karson must retain all employees who choose to stay, honour terminal benefits for those leaving, and submit compliance reports every 90 days for two years.
These unprecedented conditions suggest regulatory anxiety about the acquisition’s true implications.
Once heralded as the continent’s retail pioneer, the South African giant has systematically abandoned seven African markets since 2020 — Nigeria, Kenya, Uganda, the Democratic Republic of the Congo, Madagascar, Ghana and now Malawi — leaving behind closed stores and unemployed workers.
Each departure tells the same story: currency volatility, infrastructure challenges and economic instability that made profitable operations impossible.
The timing of its departure from Malawi could not be more devastating. The economy is haemorrhaging, with inflation reaching 28.2% in August and foreign currency reserves covering less than one month of imports, far below the recommended three-month minimum.
“Malawi’s economy is in a deep and protracted crisis marked by elevated inflation, declining living standards, and high rates of food insecurity,” the World Bank noted recently.
The International Monetary Fund’s assessment was equally bleak: “Malawi is at a critical juncture facing high inflation, an unsustainable fiscal and debt outlook, foreign exchange shortages, and fuel scarcity.”
Public debt has soared to 88% of GDP while domestic borrowing costs continue rising.
Described merely as “a property holding company registered in Malawi involved in property holding and property management business”, Karson Investment Trust emerged seemingly from nowhere to inherit Shoprite’s retail empire. Public records offer little insight into its financial backing, management structure, or retail experience. This opacity troubles industry observers.
The company will rebrand the stores as “Shopwise Trading Limited”, selling groceries and merchandise, but questions persist about its capacity to maintain employment levels and operational standards.
The pull out comes after another retailer, Spar, exited Malawi in 2022, with its stores rebranded as People’s Trading Centre (PTC) after franchise agreements collapsed. PTC itself, which once operated 85 stores nationwide, had withered to just 21 outlets by 2022.
Malawi’s wholesale and retail sector, the country’s second-largest contributor to GDP, has declined consistently over five years and faces existential threats from a heavy reliance on imports in a country with chronic foreign currency scarcity.
“We have been advocating for more effective forex policies to ensure that critical industries receive the necessary foreign currency to sustain their operations,” said Daisy Kambalame, the chief executive of the Malawi Confederation of Chambers of Commerce and Industry.
According to retail industry data, only 34.8% of businesses reported positive performance in 2024, compared with 42% in 2023. Further to this, 82.8% of businesses operated at 75% of capacity or below.
Behind corporate spreadsheets lie human stories of economic desperation.
“Prices have gone up everywhere, especially for basic household items. As ordinary Malawians, we are forced to adjust our spending,” said Esther Jere, a resident of Blantyre’s Bangwe township.
For retail workers, the Shoprite deal adds to anxiety, as previous similar transactions have resulted in significant job losses and reduced operational capacity.
The Competition and Fair-Trading Commission’s approval represents a regulatory gamble. Chief executive Lloyds Vincent Nkhoma acknowledged “potential public interest concerns” including employment losses and negative effects on consumers.
Shoprite’s exit reflects problems in Africa’s investment climate that extend beyond retail. Currency instability, infrastructure deficits and regulatory uncertainty have forced numerous multinational companies to reconsider their operations on the continent.