Nigeria’s harsh business environment which has worsened by the removal of petrol subsidy and naira devaluation has forced six multinationals to exit the country in the last ten months.
They are Kimberley-Clark, Procter & Gamble (P&G), GlaxoSmithKline Consumer (GSK) Nigeria, Equinor, Sanofi and Bolt Food.
Experts say this situation could reduce foreign investment inflows thereby affecting the country’s $1 trillion economy target by 2030.
“You can’t grow a one trillion-dollar economy without a good and strong manufacturing sector. When you don’t have this, it is just a pipe dream to achieve that economy,” Ayorinde Akinloye, a Lagos-based investor relations analyst, said.
Over the last few months, there has been a consistent increase in exit plans or a reduction in involvement in the Nigerian market by the multinationals, and this trend is worrisome, said Chinyere Almona, director general of Lagos Chamber of Commerce and Industry, said.
She added that in Nigeria, lingering foreign exchange scarcity, poor power supply, port congestion, multiple taxation, insecurity, and poor infrastructure, among others, have taken a toll on many businesses in the country.
Read also: Huggies makers, Kimberley-Clark exits Nigeria after 14 years
Here are the companies that have exited the Nigerian market
Kimberley-Clark
Kimberley-Clark, an American multinational personal care corporation announced its plans on May 31 to exit Nigeria after almost 15 years of operations.
The company commenced operations in Nigeria in 2012 but ceased activities after five years in 2019 due to unfavourable economic conditions. However, it resumed operations in 2021.
The company which produces Huggies diapers, sanitary pads, Kotex, and other hygiene and personal care products is a listed multinational on the New York Stock Exchange with the majority of its shares held by institutional investors like Blackrock Inc., Vanguard Group, Morgan Stanley, etc.
Since late 2022 after inaugurating a $100 million production facility in Ikorodu, Lagos, the company has faced numerous hurdles, including soaring energy expenses, scarcity of raw materials, and dwindling customer demand amidst the current economic climate.
P&G
P&G, the U.S.-based consumer goods company announced in November that it would transit its Nigerian operations to an import-only model, effectively dissolving its on-ground presence in the country.
The consumer goods company which has been operating in the country for more than 30 years cited unfavourable macroeconomic conditions as the reason for its exit.
The maker of iconic brands such as Pampers, Gillette, Ariel, Always and Oral-B has invested millions of dollars in the manufacturing sector. The biggest such investment was the completion of the ultra-modern $300 million plant at Agbara, Ogun State in 2017.
Read also: GSK to exit Nigeria after 51 years of operations
GSK Nigeria
In August, GSK, a British multinational pharmaceutical and biotechnology company, said it was halting manufacturing operations in Nigeria after 51 years.
According to a statement, the company noted that it will appoint a third-party distributor to sell its prescription medicines and vaccines in the country.
Some of the products that it offers are Panadol, Sensodyne, Andrews Liver Salt, and Macleans, and a range of internationally acclaimed pharmaceuticals, including Augmentin, Ampiclox, and Amoxil (antibiotics); Zentel (the anthelmintic), and vaccines.
Since the company’s announcement, the prices of drugs especially antibiotics have skyrocketed to unprecedented levels.
A report by SBM Intelligence, a research consulting and data analytics firm, showed that between 2019 and 2023, a pack of 500-milligram Ampiclox capsules recorded the highest jump, with the cost price increasing by 1,390 per cent and the selling price increasing by 1,100 per cent.
Equinor
Equinor, a Norwegian energy company announced the sale of its Nigerian business, including its share in the Agbami oil field, to Nigerian-owned Chappal Energies in November. The transaction marked the end of the company’s three-decade presence in Nigeria.
It has been a significant player in the development of Nigeria’s oil and gas sector, particularly in the Agbami field, which has produced over one billion barrels of oil since its inception in 2008.
Read also: Sanofi plots exit as Nigeria operation struggles
Sanofi
Also, in November last year, Sanofi, a French pharmaceutical giant announced a strategic change in its Nigerian operations, transitioning from direct sales to a third-party distribution model.
This move effective in February 2024, has impacted the distribution of Sanofi’s portfolio of medicines, which includes vital vaccines like polio, influenza, meningitis, and rabies.
Bolt Food
Bolt Food said it would shut down its food delivery service in the country in December.
The company announced its decision as a move to streamline its resources and maximise its overall efficiency.
A statement by the company said the decision was borne out of the need to “streamline its resources and maximise overall efficiency.”
The food app was launched in Nigeria in October 2021 after increased demand for food delivery services during the COVID-19 pandemic.
While some multinational firms are leaving the Nigerian market, others are strategically closing specific business segments and adjusting their operations to the changing local environment.
