While the Nigerian government celebrates recent multi-million dollar investments in the country, several multinationals have also left Nigeria by either divesting their operations in the country or selling their stakes to new investors.
A notable exodus of multinationals recorded this year can be attributed to the country’s economic challenges particularly the poor value of the naira, swelling inflation and interest rates, and declining consumer purchasing power.
Last year, about 767 manufacturing companies shut down, according to the Manufacturers Association of Nigeria (MAN). The association also reported that up to 365 companies experienced distress in 2023 due to rising inflation and interest rates, as well as the volatility of the exchange rate.
Although small and medium-scale businesses are the most hit by the country’s harsh economic climate, big multinational companies are not spared. Below are five multinationals that exited Nigeria in 2024.
Kimberly-Clark (K-C)
Global giant in marketing of personal care products, Kimberly-Clark (K-C) announced its decision to exit Nigeria in June. Recall that it left in 2019 and returned in 2021 with a $100m investment in Lagos.
The company, which described its exit as a “difficult decision” said it would no longer manufacture, market or sell its care products in the country local economic challenges and a need to “refocus company strategic priorities globally”.
Pick n Pay
South African retail company Pick n Pay exited Nigeria after selling its 51% stake in a joint venture with A.G. Leventis.
- The company’s Chief Executive Officer, Sean Summers while announcing the sale, said the company was leaving Nigeria to focus on its core operations in South Africa.
- The company which operated two stores in its five years in the Nigerian market, reported a pre-loss of N1.1 billion in the first half of 2024.
- This was attributed to reduced margins and higher borrowing costs.
- It struggled like many companies in the consumer goods sector due to a reduction in the purchasing powers of many Nigerians as the inflation rate maintained an upward motion.
Diageo
Diageo, a global company in the alcoholic beverages sector, announced its decision to exit Nigeria in June 2024 by selling its 58.02% stake in Guinness Nigeria Plc to Singaporean Tolaram Group.
- Although Diageo will maintain ownership of the Guinness brand its controlling stake in Guinness Nigeria Plc is ceded to Tolaram.
- The deal follows Guinness Nigeria’s struggling performance in the Nigerian market. It reported a loss after tax of N61.7 billion for the nine months ending March 31, 2024, a notable disparity from the N5.9 billion profit it recorded in the same period the previous year.
Holcim
Swiss building materials giant, Holcim AG also exited Nigeria this year, selling its 83.81% stake in Lafarge Africa PLC to Huaxin Cement Co., a Chinese company that recently started expanding to Africa. The acquisition was valued at $1 billion.
- Holcim divested its business in the most populous black nation to capitalise on higher demand in the North American market, even though Nigeria faces a higher housing deficit.
- The company’s divestment in Nigeria and Zambia exposes the low purchasing power of the populace in both African countries.
Equinor Nigeria Energy Company (ENEC)
Norwegian energy company Equinor finalised the sale of its Nigerian assets this year after operating in the country for over 30 years.
- The company sold its 54% stake in the OML 128 oil and gas lease, to Chappal Energies, in a deal estimated at $1.2 billion.
- The volatility of the onshore oil operations forced several oil giants to divest or sell their assets this year.
- Most of them focused on offshore operations that are free of local challenges such as oil theft and crude oil vandalism.
