- Many big companies left Nigeria in 2023 because of the challenging business environment
- Unilever, GlaxoSmithKline (GSK), and others are examples of companies that exited the country recently
- The companies cited macroeconomic realities that affected dollar-denominated companies
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
A recent wave has swept some multinational companies in Nigeria out of the country due to the toxic environment for business.
This is worsened by the removal of fuel subsidy, which further toughened the ease of doing business in the country.
From fast-moving consumer goods (FMCG) companies to energy and pharmaceutical companies, the inability to repatriate funds in Nigeria and the unpredictable local currency against foreign currencies has triggered multinationals to bid the country goodbye.
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The most recent case is Procter & Gamble, which announced it would dissolve on-ground operations in the country during its presentation at the Morgan Stanley Global Consumer and Retail conference.
The company clarified that its most recent strategic choice resulted from the macroeconomic realities in Nigeria and that it was challenging for an organisation denominated in dollars to conduct business in the country.
Analysts believe that the situation is a clear reflection of the challenges surrounding the ease of doing business in Nigeria.
Charles Abuede, a financial analyst said the development sheds light on the FX policies in place and the overall business environment's stability, which has been increasingly burdensome for enterprises.
"Nigerians should indeed be concerned about these developments, as they reveal the complexity of the business landscape and its impact on multinational corporations operating in the country. It underscores the importance of addressing these issues to foster a more conducive and attractive environment for businesses in Nigeria."
Legit.ng has computed the list of some multinational companies that left Nigeria in 2023:
Earlier this year, one of the leading consumer goods companies, Unilever Nigeria Plc, announced plan to stop manufacturing some of its popular products, including Omo and Lux, in Nigeria.
The manufacturer said it will exit two categories, Home Care and Skin Cleansing, which will affect the brands mentioned earlier.
Other brands affected are Sunlight, Dove Beauty Bar, Lux soap, Pepsodent Toothpaste, vaseline, Lifebuoy, and Rexona products, amongst many others.
Unilever also noted that the new model would reduce exposure to devaluation and currency liquidity.
GlaxoSmithKline (GSK), a British healthcare and multinational biotech firm, also announced plans to leave Nigeria after 51 years of operations.
The company said in a statement seen by Legit.ng disclosed its plans to cease the commercialisation of its top medicines and vaccines in the country via GSK local operating companies and move to a third-party direct distribution model.
The company added that it had stated its plans to end its distribution agreement in the coming months and appoint a third-party distributor in Nigeria to supply healthcare products.
Sanofi-Aventi Nigeria, a leading French pharmaceutical company, recently decided to close its direct operations in Nigeria. The company planned to adopt a third-party model to distribute its products in Nigeria starting in 2024.
According to the company's memo, the global pharma company will embark on a transformative business model in Nigeria in February 2024.
The company explained that its new model will enable the commercialisation of Sanofi's portfolio of medicines by a yet-to-be-named third-party distributor.
Bolt declared that it would discontinue its meal delivery service nationwide as from December 7, 2023. The corporation announced its decision to enhance its efficiency and optimise its resources.
The firm said in a statement:
“At this time, we have made the difficult decision to discontinue our food delivery operations in Nigeria due to business reasons.”
Procter & Gambles
Leading consumer goods manufacturer Procter & Gamble also revealed plans to dissolve its on-ground operations in Nigeria and turn the country into an import market.
The consumer giant stated that it is challenging to do business in Nigeria as a dollar-dependent company and that the macroeconomic reality in Nigeria is responsible for its decision.
"So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment."
A Norwegian energy corporation, Equinor, declared that it had sold its Nigerian operations, including its stake in the Agbami oil field, to Chappal Energies, a Nigerian company.
Equinor's three-decade presence in Nigeria comes to an end with this transaction.
The agreement covers the sale of Equinor Nigeria Energy Company (ENEC), which owns a 53.85% interest in oil and gas lease OML 128—including a unitised 20.21% stake in Chevron-operated Agbami oil field.
Since its establishment in 2008, the Agbami field in Nigeria has produced more than 1 billion barrels of oil, and Equinor has played a significant role in the growth of the country's oil and gas industry.
GTBank, Dangote, MTN on the list of 10 most profitable companies in Nigeria
Legit.ng earlier reported that Guaranty Trust Holding Company Plc, the parent company of Guaranty Trust Bank, emerged as the most profitable company in Nigeria for 2022.
According to data posted by Staitisense, a data-driven company, Guaranty Trust Bank (GTCO) recorded N490.13 billion, but its profit margin is 34.53%.
Profit margin is a financial ratio that measures the percentage of profit a company earns from its revenue.
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