South African retail giant Pick n Pay has announced plans to exit the Nigerian market by selling its 51% stake in a joint venture with A.G. Leventis (Nigeria) as part of a restructuring effort, according to CEO Sean Summers. Entering Nigeria less than five years ago, the retailer currently operates two stores in the country, which will soon change ownership as the company realigns its focus outside of its home market.
This development adds to a wave of multinational companies reducing their presence in Nigeria, a trend driven by operational and economic challenges. According to Dr. Vincent Nwani, an economist and former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry, the exit of foreign firms has cost Nigeria an estimated N94 trillion in output loss over the past five years. “The cumulative impact on Nigeria’s economy has been significant, with multiple sectors suffering losses,” Nwani stated.
Recent years have seen numerous corporations scale down, transfer ownership, or sell stakes, including notable exits like Diageo’s sale of its 58.02% shareholding in Guinness Nigeria to Tolaram Group in June and the recent approval of ExxonMobil’s share transfer to Seplat Energy by President Bola Tinubu.
The exodus began to accelerate in 2020, with Standard Biscuits Nigeria Ltd, NASCO Fiber Product Ltd, and Union Trading Company Nigeria PLC among over ten companies closing operations that year. By 2021, an additional 20 companies left, followed by further exits in 2022 and 2023, including major brands such as Unilever Nigeria PLC, Procter & Gamble Nigeria, and ShopRite Nigeria. This year alone, several major firms, including Microsoft Nigeria and TotalEnergies Nigeria, have also divested.
The trend underscores the challenging environment for international businesses in Nigeria, with implications for the local economy and employment. As multinationals continue to reconsider their footprint in Nigeria, stakeholders express growing concerns about the country’s ability to retain foreign investment.
