Two years after Microsoft Corp opened its African Development Center in Lagos, Nigeria’s economic hub, the world’s most valued company has decided to close the centre.
While an official statement said that the firm was “re-aligning roles within the business”, it points to a growing trend of what many have described as a mass exodus of multinational companies in Nigeria, impacting not only the companies but also Nigerians, many of whom were employees in those firms.
“Microsoft has decided to close the Africa Development Centre in Nigeria, and as a result, some of our employees based in Nigeria will be impacted,” Reuters quoted a Microsoft spokesperson.
As Africa’s most populous country continues to witness what has been described as its worst economic challenges, from the exchange rate crisis to inflation at 33.2 percent, both local and multinational companies have been forced to pack up operations or revamp their business. Since 2023, at least eight big multinational companies have exited the country, citing various reasons, including unsustainable economic conditions.
Here are eight companies that left:
1) GlaxoSmithKline
After 51 years of operations in Nigeria, GlaxoSmithKline exited the country in August 2023, deciding to transition into a third-party direct distribution model for its pharmaceutical products in Nigeria. The British multinational pharmaceutical and biotechnology company stopped its local operations, a move believed to be caused by rising operational costs.
“The Board of GlaxoSmithKline Consumer Nigeria Plc has concluded that there is no alternative but to cease operations,” GSK Nigeria said in an official statement signed by its company secretary, Frederick Ichekwai.
2) Procter & Gamble (P&G)
Procter & Gamble (P&G), a company that makes some of Nigeria’s most widely used products, from Pampers to Oral B, stopped its local operations in Nigeria in December last year and resorted to an import-only business model. As a dollar-dominated company operating in Nigeria, the firm disclosed that macroeconomic conditions have made it difficult to continue business in the country.
“The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create U.S. dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment,” Andre Schulten, Chief Financial Officer (CFO), said.
3) Sanofi Also, in November 2023, another pharmaceutical firm, a French multinational, appointed a third-party distributor to distribute its products as it ceased production. High operational costs caused by Nigeria’s exchange rate instabilities were cited by analysts as the reason for the closure.
4) Jumia Food
11 years after Jumia Technology launched Jumia Food in Nigeria, the food delivery company exited Nigeria and six other African countries in December. After years of unprofitability, Jumia Food decided to leave Nigeria, in line with the firm’s vision of allocating resources towards a path of profitability.
“The economics are tough in this market because the costs are very high, and there is plenty of competition, so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers,” The Chief Executive Officer, Francis Dufay, told Reuters.
5) Bolt Food Another food delivery company, Bolt Food, exited Nigeria on December 7, 2023, in order “to streamline resources and maximise overall efficiency as a company.”
6) Equinor
Three decades after conducting oil operations in Nigeria, Equinor Nigeria Energy Company (ENEC) sold its assets in November 2023, bringing an end to its business operations in the country.
7) MABISCO
Although Mayor Biscuits Company Limited (MABISCO) had a market share of about 5 percent in the Nigerian biscuits industry, the company shut down operations in October last year
8) Unilever
Unilever, manufacturer of famous brands like OMO, Sunlight, and Lux, exited the Nigerian home and skin cleaning market in December 2023.
After encountering a loss of N1.09 billion in the third quarter of 2023, largely due to Nigeria’s forex exchange reform and naira devaluation, the firm decided to revamp its business model and cease production in that sector.
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