In recent years, Nigeria has experienced a troubling trend in its business landscape, with many companies—both large international corporations and local businesses—either shutting down or moving their operations to other countries. This situation has raised significant concerns among business leaders and economists.
Many companies have cited several reasons for their difficult decisions, including tough economic conditions, unpredictable changes in currency value, and rising costs of doing business. The Organised Private Sector, which represents various business interests, has described these developments as alarming.
A report from the Nigerian Investment Promotion Commission revealed that from 2015 to 2022, over 50 companies, including both multinational corporations and local businesses, either closed their doors or relocated their operations out of Nigeria.
One of the latest companies to announce its exit is Pick n Pay, a South African grocery retailer. The company recently confirmed that it would sell its 51 percent stake in a partnership it had formed in Nigeria. The CEO of Pick n Pay, Sean Summers, explained that this decision is part of a larger plan to restructure the company outside of its home market. Pick n Pay had entered Nigeria in 2016 by partnering with A.G. Leventis and opened its first store in 2021, operating two locations before deciding to leave.
From 2020 to mid-2024, Nigeria witnessed a worrying trend of companies exiting the market due to ongoing economic instability and operational challenges. In 2020 alone, over 10 companies closed or scaled back their operations, including well-known names such as Standard Biscuits Nigeria Ltd and Deli Foods Nigeria Ltd. This marked the beginning of a larger trend fueled by rising economic uncertainty.
The situation got worse in 2021, with more than 20 companies leaving Nigeria. Some of the notable names included Tower Aluminium Nigeria PLC and Surest Foam Ltd. These departures highlighted growing concerns about the ability of businesses to remain profitable in such a volatile economic environment.
By 2022, the trend continued, with over 15 well-known brands ceasing operations in Nigeria. Companies like Universal Rubber Company Ltd and Mother’s Pride Ventures Ltd were among those that exited, indicating the ongoing challenges faced by both local and international firms in the country.
In 2023, the exodus persisted, with more than 10 major companies, including global giants like Unilever and Procter & Gamble, pulling out due to concerns about profitability and challenging business conditions. The trend continued into 2024, with at least five significant companies, such as Microsoft Nigeria and Total Energies Nigeria, also exiting the market.
Economist Vincent Nwani, who previously served as the Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry, identified several key reasons for the departure of multinational companies from Nigeria. He pointed to a lack of foreign currency, the declining value of the naira (Nigeria’s currency), poor infrastructure, unreliable power supply, and high energy costs. Other challenges include inconsistent government policies, security issues, and rising interest rates.
Nwani stated that the exit of these companies has cost Nigeria an estimated N94 trillion in lost economic output over five years. He warned that if the current situation continues—marked by insecurity, illegal taxes, corruption, and fluctuating foreign exchange rates—more multinational companies are likely to leave.
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Another economist, Professor Olusegun Ajibola from Babcock University, explained that the value of investments made by foreign companies in Nigeria has decreased due to the rising exchange rate against the naira. He illustrated this by explaining how a multinational company that invests $1 million in Nigeria might find that when it tries to convert its profits back to its original currency after a year, the value has dropped significantly due to the naira’s depreciation. This situation makes it less appealing for these companies to continue operating in Nigeria, leading them to sell their stakes to other businesses.
While some companies are leaving Nigeria, Ajibola noted that others are still coming in, suggesting that there are opportunities for international investors despite the challenges. He emphasized that Nigeria has a strong market potential, but local issues like infrastructure and security need to be addressed.
The Organised Private Sector has expressed deep concern about the ongoing trend of companies exiting Nigeria. Dele Oye, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, pointed out that ineffective monetary policies from the Central Bank of Nigeria have led to significant foreign exchange losses for businesses. He also mentioned that the lack of transparency in the oil and gas sector has caused inflation in gas and petrol prices after the removal of subsidies.
To reverse the trend of companies leaving, Oye called for the Central Bank of Nigeria to implement clear and stable policies that would encourage investment and stabilize the naira. He stressed that it is crucial to maintain a manageable exchange rate and to discourage individuals and businesses from holding money in foreign currencies. He also emphasized the need for a more predictable framework in the oil and gas sector to restore investor confidence.
Oye highlighted the importance of collaboration between
