Procter & Gamble, a major consumer goods company, has revealed plans to discontinue its on-ground operations in Nigeria, transforming the country into an import-focused market.
The Chief Financial Officer, Andre Schulten, disclosed this strategy during his presentation at the Morgan Stanley Global Consumer & Retail Conference.
The company cited the challenges of operating as a dollar-denominated organization in Nigeria’s macroeconomic reality as the primary reasons for this decision. Schulten explained, “It is difficult for us to operate because of the macroeconomic environment.” As a response, P&G announced a restructuring program, focusing mainly on Nigeria and Argentina, aiming to adjust its operating model and portfolio.
The move is intended to allow the company to concentrate on markets with the highest potential. Despite questions about the impact on the overall group’s portfolio, Schulten clarified that Nigeria constitutes a $50 million net sales business, a relatively small figure compared to the company’s $85 billion overall portfolio. Therefore, P&G doesn’t anticipate any significant impact on the group’s balance sheet in terms of sales or profitability.
The challenging macroeconomic conditions in Nigeria have previously led foreign USD-denominated companies, such as GSK in August, to cease operations due to difficulties repatriating U.S. dollars outside the country. The Central Bank acknowledged a forex backlog of around $7 billion. Despite President Tinubu’s efforts to attract foreign investment through reforms, the short-term outcomes appear to bring more challenges than benefits.
