7 Global Companies That Have Pulled Back from Nigeria Under Tinubu

Multinationals reassess their Nigerian operations

A number of major international companies have exited Nigeria, divested parts of their businesses or significantly reduced their local operations since President Bola Tinubu assumed office in May 2023.

A report by Nairametrics identifies seven global companies whose Nigerian strategies have changed amid foreign-exchange constraints, currency volatility, inflation, weaker consumer purchasing power and rising operating costs. While some companies have completely withdrawn, others have retained a presence through alternative business models, including third-party distribution and local partnerships.

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The developments provide an indication of the challenges facing foreign businesses operating in Nigeria and raise broader questions about the country's ability to attract and retain long-term productive investment.

Multinationals Reassess Their Nigerian Presence

International companies have historically played an important role in Nigeria's consumer, manufacturing, pharmaceutical, telecommunications and industrial sectors.

However, the operating environment has changed considerably since 2023. Businesses have had to contend with significant movements in the naira, difficulties accessing foreign exchange, elevated inflation and higher costs for energy, logistics and other inputs.

These pressures have encouraged some multinational companies to reconsider whether maintaining local manufacturing or direct operations remains commercially viable.

The result has not been a uniform wave of complete exits. In several cases, companies have changed their operating structures rather than leaving Nigeria altogether.

Procter & Gamble

Procter & Gamble (P&G) is among the multinational companies highlighted for reducing its direct operational footprint in Nigeria.

The consumer-goods company previously operated manufacturing activities in the country but subsequently moved towards a more asset-light structure.

The shift reflects the broader challenge multinational manufacturers face when local production becomes more expensive because of foreign-exchange shortages, imported-input costs and other operating pressures.

For Nigeria, the implications extend beyond the individual company because manufacturing investment supports employment, supply chains, industrial property and demand for warehouses and production facilities.

GlaxoSmithKline

GlaxoSmithKline (GSK) also changed its Nigerian operating model, moving away from direct commercial operations towards a third-party distribution arrangement.

The pharmaceutical company's decision formed part of a wider restructuring of its African business.

A shift from direct operations to distribution can reduce the amount of capital a multinational commits locally while allowing the company to continue supplying the market.

However, such changes can reduce the scale of local corporate infrastructure and direct investment associated with manufacturing, offices and distribution operations.

Sanofi

French pharmaceutical company Sanofi is another multinational that has restructured its presence in Nigeria.

The company has increasingly relied on a distribution-led model rather than maintaining the same level of direct commercial operations.

The development reflects the broader changes taking place within Nigeria's pharmaceutical and consumer markets as international businesses seek to balance market opportunities against operating costs and currency risks.

Kimberly-Clark

Kimberly-Clark, the manufacturer of consumer products including Huggies and Kotex, is also identified among companies that have reduced their Nigerian footprint.

The company's experience illustrates the pressure on consumer-facing multinationals when inflation and reduced purchasing power make it more difficult to maintain sales volumes and operating margins.

For businesses selling essential consumer products, currency depreciation can also raise the cost of imported raw materials, equipment and other inputs.

Procter & Gamble and the Shift Towards Asset-Light Operations

The changes involving P&G and other multinational manufacturers highlight a wider trend towards asset-light business models.

Instead of maintaining extensive manufacturing infrastructure, some international companies are increasingly relying on local distributors, importers and other partners.

This can reduce exposure to the costs associated with factories, equipment, utilities and local supply chains.

However, it can also mean fewer opportunities for new manufacturing facilities and industrial investment if companies decide that importing finished products is more commercially sustainable than producing locally.

Other Multinationals Have Also Reduced Exposure

The companies identified in the report form part of a broader corporate restructuring trend.

Some international businesses have sold Nigerian subsidiaries, while others have discontinued manufacturing, transferred distribution responsibilities or reduced their direct presence while continuing to serve Nigerian consumers.

The underlying reasons vary between companies, meaning the decisions should not all be interpreted as complete rejection of the Nigerian market.

Nevertheless, the accumulation of such decisions provides an important signal about the operating environment facing foreign businesses.

Foreign Exchange Remains a Major Challenge

Foreign-exchange conditions have been a significant factor in the restructuring of multinational operations.

Companies that depend on imported raw materials, machinery or finished goods can face substantially higher costs when the local currency weakens.

Currency volatility also makes it more difficult for international companies to forecast revenues and returns when profits generated in naira are converted into foreign currencies.

For businesses considering major capital investments, this uncertainty can influence decisions about whether to establish factories, expand existing facilities or maintain an asset-light distribution model.

Implications for Industrial and Commercial Property

The restructuring of multinational operations also has implications for Nigeria's property market.

Manufacturing companies are major occupiers of industrial real estate, including factories, warehouses, distribution centres and logistics facilities. A reduction in local manufacturing activity can therefore affect demand for new industrial property.

On the other hand, companies that retain distribution operations may continue to require warehouses and logistics facilities, particularly in major commercial centres such as Lagos.

The longer-term impact will depend on whether Nigeria can create conditions that encourage multinational companies to move from distribution-led operations back towards manufacturing and other forms of productive investment.

Investment Climate Remains Critical

Nigeria continues to have a large consumer market and significant opportunities for international businesses. The challenge is converting that market potential into an environment capable of supporting long-term investment.

For multinational companies, factors such as reliable power, access to foreign exchange, infrastructure, taxation, regulation, logistics and consumer purchasing power all influence investment decisions.

The Federal Government's economic reforms have sought to address some of these structural issues, but the continued restructuring of multinational operations shows that investors remain sensitive to the cost and predictability of doing business.

What the Trend Means for Nigeria

The withdrawal or scaling back of multinational operations does not necessarily mean that foreign investment is disappearing from Nigeria. Rather, it shows that the form of investment is changing, with some companies reducing fixed assets and direct operations while maintaining access to the Nigerian market through partnerships and distribution arrangements.

For Nigeria's industrial and property sectors, attracting investment that creates factories, offices, warehouses, jobs and supporting infrastructure will remain particularly important.

The challenge for policymakers will be to create an operating environment where the country's large market, natural resources and workforce outweigh the risks associated with currency volatility, infrastructure gaps and high operating costs.

The experience of the seven companies highlighted in the report therefore provides a broader indication of how Nigeria's investment environment is being reassessed by global businesses.

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