Procter & Gamble has announced its intentions to terminate its on-ground activities in Nigeria and convert the nation into an import market.
Andre Schulten, the group’s Chief Financial Officer, mentioned this during his presentation at the Morgan Stanley Global Consumer & Retail Conference.
The company claimed that doing business in Nigeria as a dollar-denominated organisation is tough and that the macroeconomic reality in Nigeria is to blame for its current strategic move.
“The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create U.S dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment.”
“So with that in mind, we are announcing a restructuring programme with the intent to adjust operating model and adjust the portfolio to ensure that we maintain the portfolio discipline that has brought us to this point. The restructuring program will largely focus on Nigeria and Argentina. We’ve announced that we will turn Nigeria into an import-only market, effectively dissolving our footprint on the ground in Nigeria and reverting to an import-only model”
It went on to say that the move will allow the corporation to focus on markets with the greatest potential.
In response to queries about the impact of the company’s planned reorganisation in Nigeria and Argentina on the entire portfolio of the group, the CFO stated that Nigeria is a $50 million net sales operation.
In comparison to its whole portfolio of $85 billion, the business does not expect any major impact on the group’s financial sheet in terms of sales or profitability.
The present macroeconomic difficulties in Nigeria have harmed international USD-denominated enterprises in the country. GSK said in August that it was discontinuing operations in Nigeria and selecting a third party to handle distribution.
These firms have frequently said that it is impossible to send back US cash outside of Nigeria. The Central Bank has revealed that it has a $7 billion FX backlog.
President Tinubu has implemented changes aimed at bringing foreign investment into Nigeria, but it appears that in the near term, they have simply increased misery.
