OPS Raises Alarm as Over 60 Companies Exit Nigeria in Four Years
In recent years, Nigeria has witnessed a troubling trend of business exits, with both multinational and local companies shutting down or relocating their operations. The causes, including economic instability, fluctuating exchange rates, and rising operational costs, have been cited as major factors behind these departures. The Organised Private Sector (OPS) has expressed growing concern over the impact this exodus is having on the country’s economy.
A report by the Nigerian Investment Promotion Commission revealed that between 2015 and 2022, over 50 companies—ranging from multinational corporations to local enterprises—ceased operations or moved their activities out of Nigeria. The most recent to announce its exit is South African retail giant Pick n Pay, which confirmed plans to sell its 51% stake in a joint venture and exit the Nigerian market. The company had entered Nigeria in 2016 and opened its first store in 2021, but is now restructuring its operations outside the country.
This departure is part of a broader trend. In 2020, more than 10 companies, including Standard Biscuits Nigeria and NASCO Fiber Products, closed or downsized their operations. In 2021, the number increased to over 20, with companies like Tower Aluminium and Mufex Nigeria among those pulling out. By 2022, over 15 companies ceased operations, further emphasizing the difficulties businesses face in Nigeria. This trend continued in 2023, with big names like Unilever Nigeria, Procter & Gamble, and ShopRite exiting due to worsening economic conditions.
The exodus persisted in 2024, with at least five major companies—including Microsoft Nigeria and Total Energies—shutting down or reducing their presence in the country. These companies have cited the ongoing volatility in Nigeria’s business environment, including the depreciation of the naira, high energy costs, poor infrastructure, and an unpredictable regulatory framework.
Economists have pointed to several key factors behind these exits. Vincent Nwani, an economist and former Director of Research at the Lagos Chamber of Commerce, highlighted that the scarcity of foreign exchange, naira devaluation, and rising energy costs are among the primary reasons multinationals are leaving. According to Nwani, the departure of these companies has resulted in significant economic losses, totaling an estimated N94 trillion over five years.
Professor Olusegun Ajibola of Babcock University added that the volatility of the exchange rate has caused foreign investments to lose value. Companies that initially invested in Nigeria in their home currency have seen their profits significantly diminished when converted back into their original currency due to the weakening naira.
Despite the challenges, Ajibola pointed out that Nigeria still holds strong potential for international investors due to its robust market, though issues like infrastructure deficits, insecurity, and regulatory challenges need urgent attention.
The OPS has raised alarms over the consequences of the ongoing exodus. Dele Oye, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), called for more stable and transparent monetary policies. He also advocated for reforms in the oil and gas sector to restore investor confidence, as the high cost of fuel and energy has become a significant barrier to business operations.
Oye further emphasized that unless the Central Bank of Nigeria (CBN) implements policies that stabilize the naira and make the business environment more attractive, the trend of company exits could continue. He also called for better collaboration between the government, the private sector, and civil society to create an environment conducive to investment and sustainable growth.
Other industry leaders, including Dr. Femi Egbesola of the Association of Small Business Owners of Nigeria, echoed these concerns, pointing out that the high cost of doing business, insecurity, and inadequate infrastructure are driving companies to relocate to more favorable economies.
The exodus of multinationals has also resulted in significant job losses and could further exacerbate the nation’s unemployment crisis. Adewale Oyerinde, Director-General of the Nigeria Employers’ Consultative Association (NECA), noted that over 15 companies have either divested or reduced their operations in the last three years, impacting thousands of workers and creating ripple effects across the value chains.
In conclusion, while Nigeria still offers a large market for investors, the continued business exits underscore the urgent need for reforms to address the macroeconomic challenges. If the government fails to improve the business climate, more companies may follow suit, leading to further economic setbacks.
