After GSK, Sanofi Exit, Another Multinational Company Set to Leave Nigeria, Gives Reasons
- The multinational consumer goods manufacturer PZ Cussons has completed plans to exit Nigeria
- The company cited the 70% naira devaluation and inflation in the country as the reasons
- The firm disclosed that it had worked hard to stop the exit but was constrained by the dwindling purchasing power of Nigerians
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The multinational company, PZ Cussons, the parent company of PZ Cussons Nigeria, has set plans to sell its assets and African subsidiaries, citing naira’s depreciation as the critical reason.
In its operational year’s results, PZ Cussons disclosed that it is considering either a partial or total sale, saying that the sale will reduce its exposure to naira fluctuations.
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PZ cites naira’s devaluation
Vanguard reports that the consumer foods maker said the board had received multiple interests in selling its Africa business.
It said that the naira’s devaluation has negatively impacted its operations, disclosing that FX losses of over 107.5 million came due to the translation and settlement of dollar-denominated liabilities in its Nigeria subsidiaries and wholly due to the naira’s depreciation, which crashed by 70% from May 31, 2023, to May 31, 2024.
It said:
“The Group is currently engaged in a process to sell its St Tropez brand and is exploring potential transactions that could lead to a partial or total sale of its Africa business, having received several expressions of interest.
“A partial or total sale of the Group’s Africa business could materially reduce the Group’s exposure to fluctuations in the Naira exchange rate.
“The Board has committed to using any proceeds from these transactions first to reduce gross borrowings, and consequently the level of the Group’s net interest cost.”
The company disclosed that the period was characterised by a 70% devaluation of the Nigerian currency, which has significant financial implications.
Thousands of jobs to go
PZ Cussons said it has worked hard to curb the impact on its Group operations while continuing to serve Nigerian consumers facing unparalleled inflation and economic challenges.
The multinational's exit is another sad development in Nigeria, as thousands of citizens are poised to lose jobs in Africa’s largest economy.
Its exit comes amid the flurry of multinationals closing shops in the country.
Early this year, GSK left Nigeria after 52 years of operations, sending the cost of pharmaceutical products soaring.
Another foreign company to leave Nigeria
Legit.ng earlier reported that Equinor Nigeria Energy Company (ENEC) has agreed with Chappal Energies to sell ENEC's 53.85% ownership in the oil and gas lease OML 128.
According to a statement obtained from Equinor's website, this includes the unitised 20.21% stake in the Agbami oil field, operated by Chevron.
However, according to the statement, the deal's completion is subject to regulatory approval.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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