Economy and Business

Major global corporations exit Nigeria amidst Dollar scarcity and economic challenges

Several major global corporations, including Procter & Gamble Co. (P&G), GSK Plc, Bayer AG, and Sanofi SA, have recently announced their exit from Nigeria, Africa’s most populous nation and second-largest economy.

The exits are attributed to challenges in accessing dollars for repatriating earnings, compounded by currency devaluations, a lack of reliable electricity supply, and congestion at ports.

According to Bloomberg, the exodus reflects broader economic issues, including policy missteps, corruption, and an over-reliance on oil.

The scarcity of dollars has led to a backlog of demand for foreign exchange, impacting companies’ ability to pay debts and import raw materials.

Also, the Central Bank of Nigeria has devalued the naira twice in the past eight months. The corporate exits worsen the pressure on the naira, which has depreciated by 86% over the last eight years.

The economic challenges, including a near-complete absence of reliable electricity and congestion at ports, have made it difficult for multinational corporations to operate profitably in Nigeria.

Nigeria’s $394 billion economy is heavily dependent on oil, and the corporate exits could exacerbate existing economic pressures.

President Bola Tinubu, who took office in May, has introduced policies to revive the economy, simplify taxes and duties, set up a committee to cut red tape, and plans to improve infrastructure.

However, experts say the measures will take time to yield results.

The exits of major corporations have raised concerns about the business environment in Nigeria and its impact on the local workforce.

The economic challenges in Nigeria have also affected other companies, with PZ Cussons Plc slashing profit expectations, Cadbury Nigeria Plc converting loans to equity due to currency constraints, and Nestle and Unilever continuing operations amidst broader economic uncertainties.

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