In the wake of Nigeria’s economic crisis, driven by the removal of petrol subsidies and the unification of FX windows, UK-based Diageo has become the latest in a line of approximately 15 multinational companies to exit the country over the past three years. Diageo announced on June 11 that it would sell its 58.02% stake in Guinness Nigeria to Tolaram.
Other major companies, such as Kimberly-Clark, Procter & Gamble (P&G), GlaxoSmithKline (GSK), Unilever, and Sanofi-Aventis Nigeria, have either exited completely or significantly reduced their presence in Nigeria.
Unilever Nigeria, for instance, exited the home care and skin cleansing markets in November 2023 to pursue a more sustainable and profitable business model. High energy costs, currency depreciation, and insecurity are frequently cited reasons for these exits. The Minister of Finance, Wale Edun, acknowledged that the lack of a liquid foreign exchange market was a major reason for these departures.
Adewale Oyerinde, Director-General of the Nigeria Employers’ Consultative Association (NECA), revealed that at least 15 multinationals with over 20,000 employees have divested or partially closed operations in the last three years. This exodus has significant consequences for organized businesses, labor, government revenue, and households.
The departures have also raised concerns about President Bola Tinubu’s goal of growing Nigeria’s economy to $1 trillion by 2026. Data from the National Bureau of Statistics (NBS) shows that while the services sector grew by 4.32% in Q1 2024, the manufacturing sector’s real GDP growth was only 1.49%, lower than the same period in 2023.
Industry leaders like Otunba Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN), and Dr. Chinyere Almona, Director-General of the Lagos Chamber of Commerce and Industry (LCCI), have called for the government to address issues such as insecurity, power supply, and foreign exchange policies to stabilize the business environment.
The departure of multinational companies poses a significant challenge to Nigeria’s economic growth. Whether recent government efforts to improve the investment climate and simplify business operations will stem this trend remains to be seen.
