Throughout 2023, Nigeria’s business environment grappled with unprecedented challenges, chiefly influenced by the complexities of an election year.
Uncertainties surrounding election outcomes and policy directions led investors to adopt a cautious stance, influencing significant long-term investment decisions.
The year kicked off with artificial cash scarcity and a botched currency note redesign, initially hampering consumer spending.
Economic recovery in the second quarter was marred by the removal of fuel subsidies and the unification of the foreign exchange market, resulting in soaring inflation and considerable depreciation of the naira.
These macroeconomic hurdles, compounded by longstanding national issues, triggered a notable departure of companies from Nigeria in 2023.
Here’s an overview of significant exits:
- Jumia Foods: A mobile app-based platform for restaurant discovery and ordering.
– Exit Date: December
– Reason: Pulling out of the food delivery business across African countries, citing the difficulty of the sector and a desire to focus on profitable ventures. - Procter & Gamble: An American multinational consumer goods corporation.
– Exit Date: December
– Reason: Dissolution of ground operations, reverting to an import-only business model due to Nigeria’s macroeconomic challenges and forex difficulties. - Bolt Food: The food delivery arm of the Estonian ride-hailing company, Bolt.
– Exit Date: November
– Reason: Strategic decision to optimize resource utilization and streamline overall efficiency. - Equinor: An international energy company.
– Exit Date: November
– Reason: Divestment from Nigeria’s petroleum industry, selling its stakes to Chappal Energies, aligning with a focus on international oil and gas portfolio. - Sanofi-Aventis Nigeria Ltd: A French pharmaceutical company.
– Exit Date: November
– Reason: Ceasing operations in Nigeria and adopting a third-party distribution business model, similar to GSK and P&G. - MABISCO Biscuit: An indigenous Nigerian biscuits company.
– Exit Date: October
– Reason: Shutdown of the multimillion-dollar plant in Ogun state, with plans to sell the company and focus on other business areas. - 54Gene: A Genomics startup.
– Exit Date: September
– Reason: Closure after a tumultuous year marked by leadership changes, staff complaints, and legal issues, despite raising $45 million in funding. - GlaxoSmithKline Consumer Nigeria: A British multinational pharmaceutical and biotechnology company.
– Exit Date: August
– Reason: Forex challenges disrupting operations, leading to a transition to a third-party direct distribution mode. - Lazarpay: A web3 and crypto payment company founded by 21-year-old Emmanuel Njoku.
– Exit Date: April
– Reason: Inability to raise funds, leading to the shutdown of the web3 and crypto payment company, operational for only two years.
The year underscored a tumultuous landscape for Nigerian businesses, showcasing exits across various sectors. From tech startups to multinational corporations, the exodus highlighted the profound impact of macroeconomic hurdles on the nation’s business community.
