Procter & Gamble (P&G), an American multinational consumer goods manufacturer, has revealed the plan to leave Nairobi in 2024 due to the high cost of doing business, dollar shortages, and a sharp decline in sales.
This come after the company announced the end of its Nigerian operations last week. It transitioned the Nigerian operations to an import-only model, citing unfavourable business conditions.
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According to MAUDHUI HOUSE, a Kenyan media house, P&G has notified workers, contractors, and government officials of its intentions to exit, affecting about 30 direct workers and contractors.
The media house said P&G will now shift to a model of dealing directly with a distributor importation model, cutting out all ground support that had helped the company command a local market share in the fast-moving consumer goods market for brands including Pampers, Always, Ariel, Downy, Gillette, and Oral B.
“We first heard it as speculation, but now it has been confirmed; they have even informed the Ministry of Labour that the last month of operation will be in June 2024,” it said in a statement.
Despite Kenyan authorities signaling American firms’ interest in setting up shop in the country, the opposite is happening as businesses find it hard to operate in a high tax and interest rate environment.
According to the Central Bank of Kenya (CBK) survey of CEOs of companies in different sectors, including manufacturing, 52.9 percent of them have seen a drop in sales compared to the previous three-month period ending September.
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“They do not anticipate much recovery even as the festive season sets in,” CBK said.
Earlier this year, the Central Bank of Kenya raised its benchmark interest rate by 200 basis points to 12.5 percent, the largest rate increase since 2011, amid efforts to stabilize the country’s struggling currency.
