Major Companies Exit Nigeria Amid Economic Turmoil in 2023

In 2023, Nigeria’s business environment faced unprecedented challenges, largely influenced by the intricacies of an election year.

Uncertainties surrounding election outcomes and policy directions led to a cautious stance among investors, impacting significant long-term investment decisions.

The year began with artificial cash scarcity and a mishandled currency note redesign, initially affecting consumer spending.

Economic recovery in the second quarter was hindered by the removal of fuel subsidies and the unification of the foreign exchange market, resulting in soaring inflation and significant depreciation of the naira.

These macroeconomic challenges, coupled with longstanding national issues, contributed to a notable exodus of companies from Nigeria in 2023. Here is an overview of significant exits:

1. Jumia Foods:
   • Exit Date: December
   • Reason: Withdrawing from the food delivery business across African countries, citing sector difficulties and a desire to focus on profitable ventures.
2. Procter & Gamble:
   • Exit Date: December
   • Reason: Dissolving ground operations, reverting to an import-only business model due to Nigeria’s macroeconomic challenges and forex difficulties.
3. Bolt Food:
   • Exit Date: November
   • Reason: Strategically optimizing resource utilization and streamlining overall efficiency.
4. Equinor:
   • Exit Date: November
   • Reason: Divestment from Nigeria’s petroleum industry, selling stakes to Chappal Energies, aligning with a focus on the international oil and gas portfolio.
5. Sanofi-Aventis Nigeria Ltd:
   • Exit Date: November
   • Reason: Ceasing operations in Nigeria and adopting a third-party distribution business model, similar to GSK and P&G.
6. MABISCO Biscuit:
   • Exit Date: October
   • Reason: Shutdown of the multimillion-dollar plant in Ogun state, with plans to sell the company and focus on other business areas.
7. 54Gene:
   • Exit Date: September
   • Reason: Closure after a tumultuous year marked by leadership changes, staff complaints, and legal issues, despite raising $45 million in funding.
8. GlaxoSmithKline Consumer Nigeria:
   • Exit Date: August
   • Reason: Forex challenges disrupting operations, leading to a transition to a third-party direct distribution mode.
9. Lazarpay:
   • Exit Date: April
   • Reason: Inability to raise funds, leading to the shutdown of the web3 and crypto payment company, operational for only two years.

The year highlighted a turbulent landscape for Nigerian businesses, with exits spanning various sectors.

From tech startups to multinational corporations, the departures underscored the profound impact of macroeconomic challenges on the nation’s business community.

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