President Bola Tinubu has set about reforming Nigeria’s economy at breakneck speed. For some multinationals that have suffered more than a decade of economic chaos, the measures have come too late.
Procter & Gamble, GSK, Sanofi and Bayer — among the world’s biggest consumer companies — are leaving, handing over the risk of operating in Africa’s most-populous nation to companies with no links to their head offices other than the right to import their goods.
For a foreign conglomerate, it’s hard to make money in the West African economy.
They must commit to paying hard currency for imports of raw materials or finished products. Then they sell their products for constantly-depreciating naira. That slashes profit margins and when it’s time to convert the local currency to restock or repatriate earnings, there are no dollars to be had.
Add that to the almost complete absence of an electricity grid, congested ports, a plethora of taxes and constantly changing policies — and the promise of a potential market of more 200 million people quickly fades.
Diesel generators at a market in Lagos. Photographer: Benson Ibeabuchi/Bloomberg
The firms’ departures are a setback for Tinubu, who has shown political bravery by cutting fuel subsidies and letting the naira trade nearer its true value. The problem is that there’s a lot more pain to come before things improve.
Until then investors will be wary.
As veteran Nigeria observer, Antony Goldman of political risk group Promedia Consulting, says: “It seems insane that companies involved in consumer goods are leaving the country with Africa’s biggest population.”
“What Nigeria must offer is not just opportunities but fewer headaches,” he adds.
Centre for Nigeria Progress 
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