Jumia Sales Plummet Due to Currency Depreciation and Inflation in Nigeria and Other Countries

The African e-commerce giant, Jumia, has reported a significant decline in its sales, primarily attributed to the currency depreciation and inflation in Nigeria and other countries.

This has led to a substantial impact on the company’s financial performance, as well as the overall e-commerce landscape in the region.

According to the latest report, Jumia’s sales were affected by the weakening of local currencies in some countries where it operates, resulting in a decrease in revenue to $186.4 million in 2023 from the $203.3 million recorded in 2022.

This 8.3% decline is a clear indication of the challenges faced by the company in the current economic climate.

The average inflation rate across Jumia’s footprint reached 13.5% in September 2023, with highs of 38.1%, 38.0%, and 26.7% in Ghana, Egypt, and Nigeria, respectively.

This has led to a decrease in consumer spending power and the ability of sellers to source goods from abroad.

Moreover, the depreciation of the Nigerian Naira against the US Dollar has been a significant factor contributing to the decline in Jumia’s sales.

The Naira experienced a 78% depreciation against the US Dollar, falling from a rate of USD/NGN 432 as of September 30, 2022 to a rate of USD/NGN 771 as of September 30, 2023.

This accounted for 61% of the reported GMV decline year-over-year.

Jumia’s management has acknowledged the challenges posed by the current economic situation and is working on a comprehensive plan to enhance the fundamentals of its platform.

The company aims to address the issues of currency depreciation and inflation in Nigeria and other countries to ensure sustainable, long-term growth in the e-commerce sector.