International company exodus continues as Pick n Pay announces exit from Nigeria

South African retailer Pick n Pay announced plans to exit Nigeria by selling its 51% stake in its joint venture with A.G. Leventis, CEO Sean Summers confirmed Monday according to Reuters. The company, which entered the Nigerian market less than five years ago, currently operates two stores in the country.

Pick n Pay’s departure is particularly notable as the company had made a bold move to enter the Nigerian market in a year when other retail giants were already planning their exits. The challenging business environment has taken its toll on numerous international companies, with Shoprite closing its Abuja store in June 2024, following an earlier closure of its Kano location in January of the same year.

The difficult business climate has also impacted digital commerce, with Jumia recently announcing the complete shutdown of its food delivery service in Nigeria. Diageo also sold its 58.02% stake in Guinness Nigeria Plc, effectively ending its presence in the country.

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These exits reflect broader economic pressures in Nigeria, where inflation has climbed to a 28-year high of 34.19%. The Nigerian currency has experienced severe depreciation, with the Naira falling more than 100% in just one year, dropping from N462 to over N1,500 per US dollar.

The challenging environment has forced several multinational companies to reconsider their Nigerian operations. Notable departures include GSK, Procter & Gamble, Sanofi, and Kimberly-Clark. These companies have cited numerous obstacles, including foreign exchange constraints, rising energy costs, and significantly reduced consumer purchasing power amid persistent inflation.

The retail sector has been particularly hard hit, with supermarkets, discount stores, and grocery outlets struggling to maintain profitability. The combination of increased operational costs and sustained inflationary pressures continues to force both large international corporations and local small and medium-sized businesses out of the market.