Danone, one of the world’s leading food and beverage companies, is increasing its investment in Nigeria, even as other multinationals exit due to a weakened naira and high inflation.

The French-headquartered firm is preparing to expand its operations in Africa’s most populous nation, betting on signs of economic recovery and the long-term potential of the continent’s largest consumer market.

“We are convinced about the potential of Nigeria,” said Christian Stammkoetter, Danone’s head of Asia, Middle East, and Africa, who spoke with Semafor on the sidelines of the Africa CEO Forum in Abidjan.

Danone, widely recognized in Nigeria for its Fan Milk brand, has strengthened its operations by investing in milk distribution networks in the northern region.

This initiative is designed to cut costs and enhance profit margins.

Stammkoetter emphasized the company’s ongoing commitment, stating that Danone will “continue doubling down through innovation and by expanding its routes to market.”

The expansion plans by the French consumer goods giant come amid a wave of multinational exits and downsizing in Nigeria, driven by a dollar scarcity and ongoing currency instability.

These challenges are fallout from the bold but essential economic reforms initiated by President Bola Tinubu nearly two years ago.

No sooner had the policies gained full momentum than at least nine multinationals, including pharmaceutical giant GSK, consumer goods leaders Procter & Gamble and Unilever, announced their exits—citing a tough business climate and frequent policy reversals.

Although they shifted operations to more business-friendly countries, several multinationals held on to their local assets to remain positioned for opportunities in Nigeria’s sizable market.

Procter & Gamble, formerly the largest U.S. non-oil investor in the country, closed its $300 million manufacturing plant in Agbara, Ogun State, as far back as 2017.

However, the assets are now being used for imports, according to Andre Schulten, Chief Financial Officer of Procter & Gamble (P&G), who disclosed this at the Morgan Stanley Global Consumer & Retail Conference held in New York in December 2023.