"We have identified five or six cities in Nigeria and see potential for between 10 and 20 Game stores," Massmart CEO Grant Pattison said.

"Nigeria has the potential to be larger [in retailing] than South Africa but it has some way to go in terms of infrastructure and political stability."

Massmart, Africa's second-biggest retailer is 51% owned by US group Walmart, the world's biggest retailer. Massmart has two stores in Nigeria and a third is being built.

It reported a 19% rise in first-half diluted headline earnings to 407.3c a share, almost entirely attributable to favourable currency swings that countered higher costs and discounts.

Headline earnings per share were boosted by an R82.4-million foreign exchange gain, without which the rise would have been 2.9%. Shares in Massmart, valued at R39.6-billion, were up by 0.3% to R183 by 1pm, with the JSE Top 40 index down by 0.5%.

Nigeria is home to nearly 160million people, compared with South Africa's 50million, according to World Bank estimates.

Shoprite, the biggest retailer on the continent, said on Tuesday that Nigeria could become as big a market as South Africa, where it runs 700 stores.