Financial analysts and economists have attributed the continued exit of multinational companies from Nigeria to high operating costs, declining consumer purchasing power, exchange rate challenges and an unfavourable business environment.
The development followed the decision by global ride-hailing company, Uber, to withdraw from the Nigerian market, making it one of several international firms that have either exited, reduced operations or divested from the country since 2023.
Reports indicate that more than 15 multinational companies have scaled back or completely left Nigeria in recent years, including Unilever Nigeria Plc, Procter & Gamble Nigeria, GlaxoSmithKline Consumer Nigeria Ltd, Shoprite Nigeria, Sanofi-Aventis Nigeria Ltd, Bolt Food and Jumia Food Nigeria.
Other companies that have restructured their Nigerian operations include Microsoft Nigeria, TotalEnergies Nigeria, PZ Cussons Nigeria Plc, Kimberly-Clark Nigeria and Diageo Plc.
Financial expert and Professor of Accounting at Lead City University, Godwin Oyedokun, said the trend should be a major concern for policymakers, although he warned against linking every corporate exit directly to the administration of President Bola Tinubu.
According to him, Uber’s exit was influenced by the company’s global restructuring and strategic decisions rather than being solely caused by Nigeria’s economic situation.
Oyedokun, however, noted that the wider pattern of multinational exits highlights a gap between improving macroeconomic indicators and the daily realities faced by businesses.
He identified high energy costs, expensive financing, exchange-rate risks, weak consumer purchasing power and regulatory uncertainties as major challenges affecting businesses in Nigeria.
“The real test of economic reforms is not only whether statistics improve, but whether businesses are investing, expanding and creating jobs,” he said.
Meanwhile, the Chief Executive Officer of SD & D Capital Management, Gbolade Idakolo, explained that many multinational companies entered Nigeria because of its huge population and expected market opportunities.
He said their projected profits had been affected by declining purchasing power among Nigerians and increasing costs of running businesses.
Idakolo added that companies were struggling with poor infrastructure, insecurity, high energy expenses and other operational challenges, forcing some firms to downsize, sell parts of their businesses or leave the country entirely.
He noted that although some economic indicators have improved, government reforms have not yet translated into immediate relief for businesses and citizens.
Nigeria’s economy recorded growth in recent quarters, while inflation has moderated and the naira has shown relative stability following foreign exchange reforms. However, analysts maintained that improving economic figures must translate into a more competitive environment for businesses to thrive.
Samuel Agada is a writer and media contributor from Olamaboro Local Government Area of Kogi State, Nigeria. He is a graduate of Biochemistry from the University of Jos and a former banker with GTBank and FCMB. A prolific writer, songwriter, educator, and Gospel preacher, he is passionate about informing, inspiring, and impacting society through his work.