Executive Summary
Nigeria has experienced a significant exodus of both multinational and local companies between 2020 and 2024. This analysis examines the pattern of corporate departures and their underlying causes, highlighting the challenges facing Nigeria's business environment.
Timeline of Major Exits
2020: Initial Wave
Scale: 10+ companies departed
Key Exits:
- Standard Biscuits Nigeria Ltd
- NASCO Fiber Product Ltd
- Union Trading Company Nigeria PLC
- Deli Foods Nigeria Ltd
Context: The year marked the beginning of a concerning trend, coinciding with global Covid-19 disruptions
2021: Acceleration
Scale: 20+ companies departed
Notable Exits:
- Tower Aluminium Nigeria PLC
- Framan Industries Ltd
- Stone Industries Ltd
- Mufex Nigeria Company Ltd
- Surest Foam Ltd
Context: Highest number of exits in the period, suggesting deepening economic challenges
2022: Continued Pressure
Scale: 15+ companies departed
Key Exits:
- Universal Rubber Company Ltd
- Mother's Pride Ventures Ltd
- Errand Products Ltd
- Gorgeous Metal Makers Ltd
2023: High-Profile Departures
Scale: 10+ major companies
Significant Exits:
- Unilever Nigeria PLC
- Procter & Gamble Nigeria
- GlaxoSmithKline Consumer Nigeria
- ShopRite Nigeria
- Sanofi-Aventis Nigeria
- Equinox Nigeria
- Bolt Food & Jumia Food Nigeria
Context: Year marked by departure of well-established multinational corporations
2024 (Through October)
Scale: 5+ major companies
Latest Exits:
- Microsoft Nigeria
- Total Energies Nigeria
- PZ Cussons Nigeria PLC
- Kimberly-Clark Nigeria
- Diageo PLC
- Pick n Pay (Latest announcement)
Key Patterns and Trends
1. Sector Distribution
- Consumer goods companies heavily represented
- Technology and digital services (Microsoft, Bolt Food, Jumia Food)
- Manufacturing and industrial firms
- Retail chains (ShopRite, Pick n Pay)
2. Exit Patterns
- Progressive increase from 2020 to 2021
- Sustained high levels of departures
- Shift from local to multinational corporations
- Increasing prominence of departing brands
Primary Challenges Cited
1. Economic Factors
- Currency volatility (Naira instability)
- Rising operational costs
- Profitability concerns
- Market viability issues
2. Operational Issues
- Regulatory hurdles
- Business environment challenges
- Infrastructure limitations
- Market competition
Implications
1. Economic Impact
- Job losses
- Reduced foreign direct investment
- Decreased market competition
- Potential supply chain disruptions
2. Market Confidence
- Negative signal to potential investors
- Reduced consumer choice
- Possible impact on local industry development
3. Future Outlook
- Continued pressure on remaining businesses
- Potential for more exits without policy intervention
- Need for economic reforms to retain businesses
Case Study: Pick n Pay Exit
The recent Pick n Pay departure exemplifies the challenges:
- Entered in 2016 via partnership with A.G. Leventis
- Opened first store in 2021
- Limited to two locations despite market potential
- Exit after short operational period despite Nigeria's large consumer market
Recommendations for Policy Consideration
1. Immediate Term
- Address currency stability
- Review regulatory framework
- Improve ease of doing business
2. Long Term
- Develop infrastructure
- Create investment incentives
- Strengthen local supply chains
- Reform business environment
This pattern of exits represents a significant challenge for Nigeria's economy and requires coordinated policy response to retain existing businesses and attract new investment.
Data from Punch
