Nigeria, despite being the largest economy in Africa — with over 200 million population, is lately facing a mass exodus of multinational companies.

From January 2023 till date, no fewer than seven multinationals have either left or announced their decision to exit the country by December. 

Many of these companies have spent decades doing business in Nigeria while others are folding up operations barely 3 years after announcing their arrivals. 

Before 2023, some of the challenges faced by local and multinational manufacturers in Nigeria have been power crisis, constant devaluation of Naira, Forex availability coupled with other stringent policies of the government.

But following President Bola Ahmed Tinubu’s inauguration on May 29, 2023, many things changed, including inflation on all fronts. The President, in his inaugural speech, had announced fuel subsidy removal — which has now affected Nigerians of all social strata — and directed the Central Bank of Nigeria (CBN) to begin monetary policy reforms. 

Subsequently, the CBN’s director in charge of financial markets, Angela Sere-Ejembi, in a press statement, said the apex bank announced immediate changes to operations in the Nigerian Foreign Exchange (FX) market.

The central bank abolished its hitherto multiple exchange rate windows and collapsed them into the business-based Investors and Exporters (I&E) window. But with the CBN’s devaluation and Foreign exchange unification, the paucity of Forex still persists.

This, arguably, affected multinationals whose business largely depended on Forex availability and purchasing power of Nigerians greatly eroded by rising inflation. 

However, one of the companies to be mentioned in this article had announced their exit before May.

While the President, on many occasions, continued to urge investors to consider the many economic potentials of the country, the exodus or divestment of multinational companies in Nigeria keep sending contrasting signals to prospective investors.

Multinational companies leaving Nigeria in 2023:

Unilever

In March, Unilever announced the exit of its home care and skin cleansing from Nigeria. 

According to the manufacturer of the famous brands such as Omo, Sunlight and Lux; the changes in its business led to the decision to fold up operations in the country.

GSK Plc

Barely four months after — precisely July 2023, Nigeria’s second-biggest drug producer and British pharmaceutical giant, GlaxoSmithKline Consumer Nigeria Plc, announced an end to manufacturing operations in Nigeria.

While no reason was given for the company’s exit from Nigeria, GSK Plc — with headquarters in the UK — said its prescription medicines and vaccines will be sold in the country through third-party distributors.

Sanofi-Aventi Nigeria

Like GSK Plc, this French pharmaceutical multinational, Sanofi, announced its decision to quit Nigeria. 

This company, in his November announcement, disclosed its resolve to appoint a third-party distributor for its commercial portfolio of medicines from February, 2024.

Bolt Food

Bolt Food, the online food-ordering arm of ride-hailing company Bolt, offers food delivery in 16 countries and 33 cities globally. But two years after launching Bolt Food in Nigeria, the company declared a difficult decision to discontinue food delivery operations in the country’s market. 

The company, in a statement, blamed the decision on the need to “streamline its resources and maximise overall efficiency.”

Aside from the company’s excuse, Bolt Food exiting may not be unconnected to its operating losses recorded lately, owing to a series of factors which are not strange to the Nigerian market. 

In 2022, about 80 percent of Bolt’s sales revenue came from driving services, followed by 10 per cent from rentals, with just nine per cent coming from food delivery.

Jumia Food

Like Bolt Food, another food-ordering platform has announced shutting down its food delivery operations, leaving other competitors in the Nigerian market. 

According to TechPoint, the company — Jumia Food — will now focus on its core physical goods business and the Jumia Pay platform across its 11 countries of operations.

“The more we focus on our physical goods business, the more we realise that there is huge potential for Jumia to grow, with a path to profitability. We must take the right decision and fully focus our management, our teams and our capital resources to go after this opportunity. In the current context, it means leaving a business line, which we believe does not offer the same upside potential – food delivery,” said Francis Dufay, Chief Executive Officer of Jumia.

Equinor

In November, Equinor Nigeria Energy Company (ENEC), a Norwegian energy corporation, —  which holds a 53.85 percent ownership in oil mining lease (OML) 128, including a 20.21 percent stake in the Agbami field, operated by Chevron — has announced the sale of its Nigerian operations

This includes the company’s stake in Agbami oil field and were all sold to a Nigerian-owned firm, Chappal Energies.

With this transaction, Equinor’s three-decade presence in the Nigerian energy market comes to an end.

Procter & Gamble (P&G)

The US consumer goods powerhouse Procter & Gamble (P&G), last Tuesday, announced its decision to shut down manufacturing in Nigeria. 

The maker of iconic brands including Pampers, Gillette, Ariel, Always and Oral-B, which has been operating in the country for 30 years and ran two manufacturing plants in Ibadan, Oyo State and Agbara, Ogun State, disclosed readiness to pivot to import-only activity, describing Nigeria and Argentina markets as problematic for the corporation. 

“So when you think about places like Nigeria, when you think about places like Argentina, it’s very difficult for us as a U.S. dollar-denominated company to create value,” Andre Schulten, the chief financial officer, said at Morgan Stanley Global Consumer & Retail Conference in New York.

However, Segun Ajayi-Kadir, the director-general of the Manufacturers Association of Nigeria (MAN), in his reaction to P&G’s and the mass exodus of multinational companies, said more may leave because the manufacturers operate in a challenging environment. 

“Obviously, we received it (P&G exit) with sadness but it is not totally unexpected and more may happen because there is no doubt that we operate in an environment that is challenged,” Ajayi-Kadir said this while appearing on Channels Television’s Sunrise Daily.

According to him, the exit of multinationals should teach the government a lesson on giving priority to local manufacturers, saying “So, what this means is that if you have a challenged local manufacturer, he is not likely to go anywhere.”