Multinational companies are cutting back their presence in Nigeria or pulling out altogether as currency problems hamper their operations and hurt consumers
Procter & Gamble, an Ohio-based consumer goods giant, last week became the latest big company to scale down its operations. It said it will stop producing its care and hygiene products in the continent’s most populous country.
P&G’s chief financial officer Andre Schuten said tough macroeconomic conditions, particularly the local naira currency’s weakness, is driving the shift. Nigeria is “very difficult for us as a U.S. dollar-denominated company to create value” in, Schuten said at Morgan Stanley’s Global Consumer and Retail Conference, an investor event in New York.
British multinationals GSK and Unilever are two other high profile consumer goods companies to have announced changes to their Nigeria operations this year. Each signaled forex pressures as fueling decisions to shift to a third party distributor model (in GSK’s case) or retire the production of well-known products (as Unilever announced in March). In September, another British group, PZ Cussons, said “foreign exchange challenges” was causing it to delist from the Nigerian stock market.
“Nigeria is a $50 million net sales business,” Schuten said, “a really small” market in the context of the company’s global net sales of $85 billion. P&G products, like diaper brand Pampers and laundry powder Ariel, will now be available in Nigeria on an import-only basis.
