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Companies That Have Shut Down Operations In Nigeria Since 2020
With South African retail giant Game Discount World Limited, set to exit the Nigerian market this Christmas, many are now wondering which company is set to leave the country.
Although the company announced on October 4, that it initially planned to sell its Nigerian assets to Xanderwill Limited, in a new letter dated October 26th, it decided to empty all its stores through a stock clearance sale.
The Nigerian economy has been unfriendly with most companies in the country as they have to grapple with issues that affect their earnings which in most cases, is insufficient to meet their head cost, let alone profit.
They have to deal with the country's inflation, bad government policies, high or multiple taxation, poor power supply, high cost of fuel and diesel, foreign exchange scarcity, difficulty in accessing raw materials, rising production cost, inability to pay up debts, amongst others.
Many companies in Nigeria, both foreign and locally owned, are also facing these same challenges are really struggling to survive.
However, some have not been able to surmount this challenge and have decide to halt their operations in the country.
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Below is a list of notable companies that have left Nigeria since 2020:
Formerly owned by a South African company, 16 years after it opened its first outlet in Nigeria, Shoprite, African retail giant, in June 2021, finally sold its Nigerian operations to a company owned by a group of local investors led by property firm Persianas Investment, Ketron.
The pharmaceutical company announced its plan to shut down its manufacturing plant in Agbara Industrial Estate, Ogun state in 2021. The company also in June 2018, announced its intentions to sell Horlicks, its malted drinks business, in its bid to fund a $13 billion buyout in its consumer healthcare joint venture with Novartis.
Mr Price Group Ltd., retailers in apparel, homeware and sportswear, announced in June 2020 that it was closing its Nigerian business. They arrived at the decision after scrutinising all its markets to decide if they can build scale on each investment and if they "warrant the time, finances and resources". They however later decided to close up shop.
Other companies that were said to have closed shop recently, include: Standard Biscuits, Nasco Fibre, UTC Foods, Deli Foods Limited, and many others, include many Small and Medium Scale industries.
The Manufacturers Association of Nigeria (MAN) said over 50 member-companies had shut down owing to issues related to FX scarcity and its members' inability to import raw materials.
According to ICIR, the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir explained that manufacturers would often get $50,000 or less after requesting $1 million or more from the Central Bank of Nigeria (CBN) through the banks.
Further more, MAN adds that the average interest rate charged on manufacturers in 2020 was 22 per cent and over 20 per cent in 2021.
In a recent CEO Confidence Index conducted by MAN, heads of corporate organisations suggested ways of preventing factory shutdowns and galvanising the manufacturing sector, saying "Government must incentivise investment in the development of raw materials locally through the backward integration and resource-based industrialisation initiatives."
They urged government to make forex available to the production sector, particularly the manufacturing sector while sustaining the eligible customer initiative. They also urged the government to ensure that more electricity was supplied to the manufacturing sector.
They said, "It is important to strengthen the Bank of Industry and Bank of Agriculture to adequately provide liberal finance for the manufacturing sector. It is also important to monitor the implementation of Executive Order 003 to ensure compliance by MDAs so as to boost activities in the manufacturing sector."
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