By Sunday Ameh
Financial analysts and economists have attributed the continued exit or downsizing of multinational companies in Nigeria to high operating costs, weak consumer purchasing power, foreign exchange risks, infrastructure gaps and regulatory uncertainties.
Uber recently announced its exit from Nigeria, joining a growing list of international companies that have either left the country, reduced operations or sold parts of their businesses in recent years.
Other firms affected include Unilever, Procter & Gamble, GlaxoSmithKline, Shoprite, Sanofi-Aventis, PZ Cussons, Kimberly-Clark and Diageo, while several others have restructured their Nigerian operations.
Despite improvements in some macroeconomic indicators, analysts say businesses continue to face difficult conditions on the ground.
Professor of Accounting at Lead City University, Godwin Oyedokun, said Uber’s exit should concern policymakers but cautioned against directly blaming the Tinubu administration for the company’s decision.
He said Uber’s move was also influenced by its global restructuring and strategic priorities.
Oyedokun, however, noted that the broader pattern of corporate exits highlights a gap between improving macroeconomic figures and the realities faced by businesses.
According to him, high energy and financing costs, exchange-rate risks, weak consumer demand and regulatory uncertainties continue to undermine investment.
The CEO of SD & D Capital Management, Gbolade Idakolo, similarly said multinational companies were initially attracted by Nigeria’s huge population and market potential.
He explained that inflation, currency depreciation and rising operating expenses had eroded projected profits, forcing some companies to downsize or leave.
Idakolo said infrastructure deficiencies, high energy costs and security challenges had further increased the cost of doing business.
Both analysts urged the government to ensure that recent economic improvements translate into stronger businesses, increased investment, job creation and better living standards for Nigerians.
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