In 2023, the Nigerian economy faced one of its toughest years in a decade, with both small businesses and major companies bearing the brunt of an economic downturn.
The inception of the economically challenging year was marked by the ill-timed and poorly executed Naira redesign, leading to artificial cash scarcity. In the first quarter of 2023, Nigeria's GDP growth reportedly fell to 2.31 per cent from 3.52 per cent in the fourth quarter of 2022.
Shortly thereafter, came the general elections in Africa's largest economy - a highly anticipated event that, as usual, sparked caution among investors. With the new president came a series of policies and economic reforms.
So, from floating the naira to ditching the age-old fuel subsidy and rolling out new tax reforms, Nigeria's economy got a major makeover.
The reforms escalated the challenges Nigeria's economic scene had long contended with, including a power crisis, constant devaluation of the naira, and forex scarcity.
This triggered the departure of companies, ranging from multinationals to small businesses shutting their doors in 2023.
But things may be different in 2024; there have been positive economic forecasts for the country. According to the United Nation's World Economic Prospect report for 2024, Nigeria's economic growth is set to extend from 3.0 in 2023, to 3.1. The International Monetary Fund holds a similar outlook.
Below are 10 companies that exited Nigeria, Africa's largest economy in 2023:
1. GlaxoSmithKline
In August, GlaxoSmithKline UK exited Nigeria's pharmaceutical market after over 51 years due to challenges like foreign exchange complexities, security concerns, and high operational costs.
2. Procter & Gamble (P&G)
In December, P&G discontinued its on-ground operations in Nigeria, transforming the country into an import-focused market. The company cited challenges in conducting business as a dollar-denominated organization and attributed its strategic decision to the macroeconomic conditions in Nigeria.
3. Sanofi
In November, Sanofi, a French pharmaceutical multinational discreetly announced its exit from Nigerian operations. The company said it has appointed a third-party distributor to handle its commercial portfolio of medicines from February 2024.
Analysts say the move signals a consequence of the troubles foreign-owned businesses are facing with foreign exchange-related losses.
4. Jumia Food
In December, Jumia Food made its exit from Nigeria, along with six other African countries. The move is in line with Jumia's strategy to optimize its capital and resource allocation and to continue its path to profitability.
5. Bolt Food
In December, Bot Food exited the Nigerian market. The company announced its decision as a move to streamline its resources and maximise its overall efficiency.
6. 54gene
After securing $45 million in funding, genomics startup 54gene departed Nigeria in September, concluding a tumultuous year marred by leadership changes, staff complaints, and legal issues, despite the substantial funding raise.
7. Equinor
Equinor Nigeria Energy Company (ENEC), a Norwegian energy corporation, divested from its Nigerian operations in November. ENEC, which owns a 53.85% stake in oil mining lease (OML) 128, including a 20.21% interest in the Chevron-operated Agbami field.
The sale of its assets brought an end to Equinox's over three decades of presence in Nigeria dating back to 1992.
8. Lazerpay
Lazerpay, a web3 and crypto payment company, shut its operations in April. The decision to shut down comes several months after the founder, Njoku Emmanuel, revealed the company's challenges in raising funds.
9. MABISCO Biscuits
In October, Mayor Biscuits Company Limited (MABISCO), a biscuit manufacturing company in Nigeria announced the shutdown of its operations and the intention to sell its biscuit production facility.
In 7 years, MABISCO has accumulated 5% market share in the Nigerian biscuits market, with a sustained market presences in the north, west and east of the country.
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