A wave of shock rippled through Nigeria’s business community as news broke of Procter & Gamble’s (P&G) decision to halt local production and switch to an import-only model. This follows similar exits by Sanofi and GlaxoSmithKline (GSK), raising concerns about the country’s attractiveness to foreign investors.
Analysts point to the lack of a level playing field, unpredictable policies, and rampant corruption as key factors driving these exits. Investors who value transparency and the rule of law are increasingly finding Nigeria’s business environment hostile.
Atedo Peterside, a prominent investment banker, described the situation as a “replacement” of investors who prioritise good governance with those willing to “partner” with politicians and “game the system” through opaque deals. This shift, he warns, could have devastating consequences for Nigeria’s long-term economic growth.
Writing on his X account, Peterside said, “Another way to look at this Procter & Gamble exit story is that multiple investors who cherish the rule of law, policy consistency, macroeconomic stability, a level playing field etc are running away from Nigeria.
“They are being “replaced” only partially by investors who know how to “partner” with politicians and/or game the system through waivers, exemptions etc.”
President Bola Tinubu’s recent economic reforms, including the removal of petrol subsidies and devaluation of the naira, aimed to boost investor confidence. However, the exodus of major companies suggests that these reforms may have fallen short, failing to address the fundamental issues deterring foreign investment.
P&G’s Chief Financial Officer, Andre Schulten, disclosed the company’s plan during a presentation at the Morgan Stanley Global Consumer & Retail Conference in New York.
P&G’s decision comes amidst longstanding challenges in Nigeria, including a lack of policy consistency, macroeconomic instability, and an uneven playing field for businesses.
