Utweets
Nigeria, the giant of Africa, has recently experienced a great economic downturn, which has led to the exodus of several multinational companies (MNCs) from the country. Multinational companies thrive in environments with clear, stable, and predictable regulatory frameworks. In Nigeria, however, frequent changes in government policies, coupled with inconsistent enforcement, have created a climate of uncertainty. ...READ THE FULL STORY FROM SOURCE ↔️
The decline in the purchasing power of Nigerian consumers due to high inflation rates, unemployment, and poverty levels also contributes to the exit of these multinationals. Consumers have less disposable income to spend on goods and services, which translates to lower sales volumes and reduced profitability for these multinationals.
In this article are multinational companies that have recently exited the country.
GlaxoSmithKline
GlaxoSmithKline, also known as GSK Plc, is a multinational pharmaceutical and biotechnology company with headquarters in the UK. In August 2023, it announced that it would cease operations in Nigeria after over 50 years of operation. The decision followed a 15% revenue drop over two years due to Nigeria’s currency volatility and other economic barriers.
PROCTER & GAMBLE
Procter & Gamble, also known as P&G, is a leading multinational consumer goods company headquartered in the US. It is known for products like Pampers, Ariel, Always, Oral B, Gillette, and Safeguard. P&G ended its operations in the country due to rising production costs, inflation, and foreign exchange challenges.
The multinational’s newly adapted strategy now focuses on imports rather than local production.
DIAGEO
The company, which owns Guinness, announced it was selling its stake in Guinness Nigeria to the Tolaram Group due to declining sales and increased taxes. Diageo saw a substantial financial loss and cited weakened consumer purchasing power as a primary factor behind its exit. Although Diageo has transferred its operations, Guinness products are still available in Nigeria under new ownership.
SANOFI
Sanofi-Aventis, a French pharmaceutical company, also exited Nigeria due to difficulties in obtaining foreign currency, crucial for importing medical products. Sanofi now operates in Nigeria through a third-party distributor to continue supplying essential medicines without direct investment in a challenging market as the nation’s.
EQUINOR
Norwegian energy company Equinor sold its Nigerian assets after operating in the country for over 30 years. The company held significant stakes in Nigeria’s oil fields, particularly the Agbami field. However, challenges like low investor returns and competition in a volatile oil market led Equinor to transfer its stake to a Nigerian company, Chappal Energies Mauritius Ltd.
The sale of its assets ended Equinor’s over thirty-year presence in Nigeria, which began in 1992.
MABISCO
In October 2023, Mayor Biscuits Company Limited (MABISCO), a biscuit manufacturing company in Nigeria, announced the shutdown of its operations and the intention to sell its biscuit production facility.
KIMBERLY-CLARK
Kimberly-Clark began operations in Nigeria in 2012 but stopped due to unfavourable economic conditions after five years in 2019 to later restart in 2021. The company produces Huggies diapers, sanitary pads, Kotex, and other hygiene and personal care products. However, Kimberly-Clark has confirmed that it is leaving Nigeria after almost 15 years in the country and less than three years after it opened a new US$100 million manufacturing facility in Ikorodu, Lagos.
In a short press release, the company confirmed widespread speculation in the local media, saying it is a “difficult decision” made due to “refocused company strategic priorities globally as well as economic developments in the country.”
Currency instability, a high inflation rate, and weak consumer purchasing power have forced many multinationals to reevaluate their business strategies. Some have chosen to exit the Nigerian market, while others have reduced their presence or rely on local partners.
