Nigeria’s Turbulent Business Climate: A Growing Exodus of Companies
Despite efforts to revitalize the Nigerian economy, the country is currently experiencing a significant exodus of companies, with both local and international businesses opting to close or relocate due to persistent economic woes, currency instability, and increasing operational expenses.
The latest prominent firm to depart is South African retail giant Pick n Pay, which has announced its decision to exit the Nigerian market by selling its 51% stake in a joint venture. In a statement, CEO Sean Summers explained that this decision aligns with the company’s broader restructuring efforts outside of South Africa.
Pick n Pay initially entered the Nigerian market in 2021, partnering with A.G. Leventis (Nigeria). However, the company’s exit highlights the difficulties faced by businesses operating in Nigeria, including the impact of economic challenges, a volatile naira, and regulatory issues on the retail industry.
According to Vincent Nwani, an economist and former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry in Nigeria, over 10 companies shut down operations in 2020 alone, with more than 20 companies exiting the country in subsequent years.
A Growing Trend: Companies Leaving Nigeria
Below is a breakdown of the companies that left Nigeria from 2020 to 2024:
2020: At least 10 companies exited Nigeria due to deteriorating economic conditions, including Standard Biscuits Nigeria Ltd, NASCO Fiber Product Ltd, Union Trading Company Nigeria PLC, and Deli Foods Nigeria Ltd.
2021: The pace of departures accelerated, with over 20 companies pulling out, including Tower Aluminium Nigeria PLC, Framan Industries Ltd, Stone Industries Ltd, Mufex Nigeria Company Ltd, and Surest Foam Ltd.
2022: In 2022, over 15 prominent brands exited Nigeria, continuing the trend. Some of these companies included Universal Rubber Company Ltd, Mother’s Pride Ventures Ltd, Errand Products Nigeria Ltd, and Gorgeous Metal Makers Ltd.
2023: The exodus persisted in 2023, with at least 10 major companies citing profitability challenges, including Unilever Nigeria PLC, Procter & Gamble Nigeria, GlaxoSmithKline Consumer Nigeria Ltd, ShopRite Nigeria, Sanofi-Aventis Nigeria Ltd, Equinox Nigeria, and Bolt Food & Jumia Food Nigeria.
2024 (January-October): By mid-2024, a further five prominent companies had exited Nigeria due to the persistently challenging business environment, including Microsoft Nigeria (Engineering section), Total Energies Nigeria (affected by divestment plans), PZ Cussons Nigeria PLC, Kimberly-Clark Nigeria, and Diageo PLC.
