At least 5,000 jobs would be affected as a global leader in consumer goods, Procter & Gamble, announces plans to dissolve its on-ground operations in Nigeria and carry out imports only due to foreign exchange challenges.
The maker of iconic brands including Pampers, Gillette, Ariel, Always and Oral-B, which started operation in Nigeria in 1991, and has invested millions of dollars in the manufacturing sector including completing its ultra-modern $300 million plant at Agbara, Ogun State in 2014, claimed it provides over 5,000 jobs directly and indirectly through its offices, suppliers and distributors and has created over 200 SME jobs.
However, the Chief Financial Officer of the group, Andre Schulten, during his presentation at the Morgan Stanley Global Consumer & Retail Conference, said operating in certain markets, such as Nigeria and Argentina, has become increasingly difficult due to macroeconomic realities.
The current macroeconomic conditions in Nigeria have made it difficult for USD-denominated companies to send back US dollars outside Nigeria.
"The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create US 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 the operating model and adjust the portfolio to ensure that we maintain the portfolio discipline that has brought us to this point. The restructuring programme 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," he said.
Despite being the largest economy in Africa with over 200 million human population, multinational companies are exiting Nigeria because of recent macroeconomic challenges, especially forex challenges.
The governor of the Central Bank of Nigeria, Olayemi Cardoso, recently announced that the apex bank has started clearing the forex backlog which is said to be about $10bn.