The harsh and unfriendly business climate in Nigeria continues to take its toll on the system as more multinational firms plan to leave the country, with expected loss of $335 million (about N310bn) in Foreign Direct Investments, FDI.
By Emma Ogbuehi
The harsh and unfriendly business climate in Nigeria continues to take its toll on the system as more multinational firms plan to leave the country, with expected loss of $335 million (about N310bn) in Foreign Direct Investments, FDI.
Procter & Gamble, P&G, a major global player in the Fast Moving Consumer Goods, FMCG, segment and Equinor, another global player in the upstream oil sector, are among the latest multinationals set to exit the country.
The estimated N310bn amount represents the combined assets value of the two business giants. Their exit comes on the heels of relocation in the second half of this year by two other major multinational companies, GlaxoSmithKline, GSK, Consumer Nigeria Plc and Sanofi-Aventis Nigeria Limited, a French pharmaceutical company, which pulled out assets estimated at over $800 million from Nigeria, citing harsh operating environment.
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Equinor is exiting after selling its Nigerian business, including its share in the Agbami oil field to Nigerian-owned energy company Chappal Energies.
Explaining the decision, Andre Schulten, chief financial officer, P&G, said the decision is a result of “the challenging business environment in Nigeria, as well as the difficulty in creating US dollar value.”
On his part, Equinor’s Senior Vice President for Africa Operations, Nina Koch, in a statement, said: “Nigeria has been an important part of Equinor’s international portfolio over the past 30 years.
“This transaction realises value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas.”
The liberalization of the downstream oil sector and merger of the forex regime by President Bola Tinubu, are two measures that have pushed up the cost of living and prices of goods, impacting heavily on the purchasing powers of the consumers. There are fears of more companies leaving the country unless drastic measures are taken to lessen the frustrating economic climate.