Pick n Pay Joins Exodus of International Companies Leaving Nigeria

South African retail giant Pick n Pay has announced its plans to exit the Nigerian market by divesting its 51% stake in a joint venture with A.G. Leventis (Nigeria). The decision, which CEO Sean Summers confirmed on Monday, underscores Pick n Pay’s intent to streamline its operations outside its core South African market after less than five years in Nigeria.

Pick n Pay’s withdrawal adds to a mounting wave of international companies scaling down or leaving Nigeria altogether, citing a challenging business environment. Multinational corporations have increasingly transferred ownership, downsized, or sold stakes to mitigate risks in Nigeria’s volatile market.

The list of departing companies includes Diageo, which recently sold its 58.02% shareholding in Guinness Nigeria to the Tolaram Group in June 2024. Similarly, earlier this month, President Bola Tinubu approved the transfer of ExxonMobil’s shares to Seplat Energy, further highlighting the growing trend of international oil companies (IOCs) exiting Nigeria.

Economic Impact of Corporate Departures

According to Dr. Vincent Nwani, former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry, this corporate exodus has inflicted a severe toll on Nigeria’s economy, resulting in an estimated loss of N94 trillion in output over the past five years. He reports that over 10 companies left in 2020 alone, including prominent names like Standard Biscuits Nigeria Ltd and Deli Foods Nigeria Ltd. In 2021, the number increased to more than 20, including Tower Aluminium Nigeria PLC, Framan Industries Ltd, and Surest Foam Ltd. Each subsequent year has seen additional brands—Unilever, Procter & Gamble, GlaxoSmithKline, and ShopRite among them—exit or reduce their footprint in Nigeria.

In the first half of 2024, at least five major companies have already departed Nigeria, including Total Energies Nigeria, PZ Cussons Nigeria PLC, and Kimberly-Clark Nigeria.

Reasons Behind the Corporate Departures

Analysts point to Nigeria’s ongoing economic instability, foreign exchange shortages, inflationary pressures, and regulatory uncertainties as primary factors driving multinationals away. For retailers like Pick n Pay, currency fluctuations and reduced consumer purchasing power have compounded operational challenges, ultimately rendering the market unsustainable for long-term growth.