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ECONOMY

World watches as Nigeria’s foreign currency woes scare multinationals

By our African Marketing Confederation News Team | 2024

At least four global conglomerates have announced they are exiting the country. There are concerns that more may follow.

In Nigeria, Africa’s most populous nation and potentially one of its strongest economies, alarm bells are continuing to ring as big multinationals either exit the country or pare back their operations to an import-only business model.

Lagos, Nigeria. Photo by David Iloba from Pexels

 

A report published last week by financial news agency Bloomberg – and widely reported around the world – notes that at least four global conglomerates have recently announced they are exiting the country. They are Procter & Gamble (commonly known as P&G), GSK, Bayer and Sanofi. 

 

Other multinationals that have stayed are struggling along with the economy. Among them are Unilever and Nestlé. 

 

“At the heart of the exodus is a scarcity of the dollars international businesses need to repatriate earnings,” the Bloomberg report states. 

 

“The central bank has devalued the naira twice in the past eight months and is still struggling to clear a backlog of demand for greenbacks companies require to pay debts and import raw materials. A near complete absence of a reliable electricity supply and congestion at Nigeria’s ports are compounding the malaise.” 

 

There may be more closures 

 

Bloomberg quotes Segun Ajayi-Kadir, Director-General of The Manufacturers Association of Nigeria advocacy group, as saying: “If the current situation doesn’t improve, certainly we’ll have more closures. 

 

“It’s news because it’s P&G. It’s news because it’s GSK. It’s news because they have been in the country for a long time – but there are others that have died quietly.” 

 

According to Bloomberg, Cadbury Nigeria has had to convert loans from its UK parent into equity because it couldn’t find the foreign currency to repay them. PZ Cussons, a UK-based maker of soap and other personal care products that counts Nigeria as its biggest market, this month slashed its profit expectations for the group. 

 

Tielman Nieuwoudt, an emerging markets expert and occasional contributor to Strategic Marketing for Africa, the magazine of the African Marketing Confederation, says the scarcity of foreign currency within the Nigerian economy has made it challenging for companies to import raw materials and repatriate profits, severely affecting their operations and financial viability. 

 

“Airlines like United Airlines and Iberia have temporarily suspended flights to Nigeria due to difficulties in repatriating earnings, a consequence of the foreign exchange scarcity,” he notes in a social media post. 

 

“The automotive industry has also been hit, with car manufacturers halting assembly due to difficulties in sourcing foreign currency for parts imports.” 

Dr Kin Kariisa

Group CEO - Next Media

Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

  • Other current and previous roles played by Dr Kin Kariisa:
  • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
  • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
  • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
  • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
  • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.