Multinationals Flee Nigeria Amid Forex Shortages, Rising Operating Costs

Since President Bola Tinubu took office in May 2023, several multinational corporations have scaled back their operations in Nigeria due to severe foreign exchange shortages and rising operating costs.

The exodus of companies includes Procter & Gamble (P&G), which ceased its on-ground manufacturing operations in Nigeria and transitioned to an import-only distribution model. P&G cited the challenges of operating in a dollar-denominated environment while earning in a depreciating Naira, making local production financially unviable.

GlaxoSmithKline (GSK) also ended its direct commercial operations in Nigeria after more than five decades, opting for a third-party distribution model to mitigate currency risk. Sanofi, another pharmaceutical giant, ceased direct operations and appointed a third-party distributor to handle the commercialization of its medicines in Nigeria.

Kimberly-Clark closed its manufacturing facility in Ikorodu, Lagos, while Equinor divested its Nigerian oil and gas business after three decades. Diageo sold its 58.02 percent stake in Guinness Nigeria to Tolaram Group, and Bayer restructured its operational presence, relying on local partners and third-party logistics.

The cumulative impact of these corporate retreats poses a significant challenge for the Tinubu administration's job creation and foreign direct investment targets. Reversing this trend will require durable forex market stability and improved ease of doing business for manufacturers.