Against the backdrop of more exits from ground operations in Nigeria by more multinational companies, Nigeria’s economy is expected to lose $335 million (about N310bn) in Foreign Direct Investments, FDI.
The amount represents the combined assets value of the two latest exit announcements by Procter & Gamble, P&G, a major global player in the Fast Moving Consumer Goods, FMCG, segment and Equinor, another global player in the upstream oil sector.
Procter & Gamble (P&G), an American multinational consumer goods, says it has plans to transition from local production to solely importing its products as the firm winds down its on-ground presence in Nigeria.
Equinor is exiting after selling its Nigerian business, including its share in the Agbami oil field to Nigerian-owned energy company Chappal Energies.
Explaining the decision, Andre Schulten, chief financial officer, P&G, said the decision is a result of “the challenging business environment in Nigeria, as well as the difficulty in creating US dollar value.”
On his part, Equinor’s Senior Vice President for Africa Operations, Nina Koch, in a statement, said: “Nigeria has been an important part of Equinor’s international portfolio over the past 30 years.
“This transaction realizes value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas.”
In the second half of this year two other major multinational companies, GlaxoSmithKline, GSK, Consumer Nigeria Plc and Sanofi-Aventis Nigeria Limited, a French pharmaceutical company, pulled out assets estimated at over $800 million from Nigeria, citing harsh operating environment.