….Procter & Gamble (P&G) planned exit on-will throw 5,000 into unemployment market
….It cites forex challenges and macroeconomic difficulties
The Procter & Gamble (P&G), a global consumer goods powerhouse, is set to close shop on-ground operations in Nigeria,
The exit of the company will affect at least 5,000 jobs.
The company said the decision stemmed from mounting foreign exchange challenges in the country.
Known for its iconic brands like Pampers, Gillette, Ariel, Always, and Oral-B, P&G commenced operations in Nigeria in 1991 and invested millions in the manufacturing sector. Completing its state-of-the-art $300 million plant in Agbara, Ogun State, in 2014 was a testament to its commitment to the Nigerian market. The company claimed to provide over 5,000 jobs directly and indirectly through its offices, suppliers, and distributors, including creating over 200 SME jobs.
However, Chief Financial Officer Andre Schulten delivered a sombre message during the Morgan Stanley Global Consumer & Retail Conference. He revealed that operating in certain markets, notably Nigeria and Argentina, had become increasingly challenging due to macroeconomic realities.
Schulten explained, “The macroeconomic conditions in Nigeria have made it difficult for USD-denominated companies to repatriate US dollars outside the country. Operating and creating US dollar value in markets like Nigeria gets increasingly difficult.”
In response to these challenges, P&G announced a restructuring program, primarily targeting Nigeria and Argentina. Schulten outlined the plan: “We will turn Nigeria into an import-only market, effectively dissolving our footprint on the ground and reverting to an import-only model.”
Despite Nigeria’s status as the largest economy in Africa with a population exceeding 200 million, multinational companies are grappling with macroeconomic hurdles, particularly forex challenges.
The Central Bank of Nigeria, led by Governor Olayemi Cardoso, has acknowledged the forex backlog, estimated at $10 billion, and initiated measures to address the situation. The departure of P&G, however, underscores the severity of the challenges foreign companies face in the current economic landscape.
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