Consumer goods giant Procter & Gamble (P&G) has unveiled plans to discontinue its on-ground operations in Nigeria, transforming the country into an import-centric market. The announcement was made by P&G’s Chief Financial Officer, Andre Schulten, during his presentation at the Morgan Stanley Global Consumer & Retail Conference.
The decision is attributed to the challenges of operating as a dollar-denominated organization in Nigeria’s macroeconomic environment. P&G believes that transitioning to an import market will allow the company to navigate the complexities associated with the local economic conditions.
Mr. Schulten emphasized, “It gets increasingly difficult to operate and create U.S dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment.”
The move aligns with P&G’s strategy to focus on markets with the highest potential. Responding to inquiries about the impact of the restructuring on the company’s overall portfolio, the CFO clarified that Nigeria constitutes a $50 million net sales business. With an overall portfolio worth $85 billion, P&G anticipates no significant material impact on the group’s balance sheet in terms of sales or profitability.
This decision reflects a trend seen in other foreign USD-denominated companies in Nigeria, with GSK announcing a cessation of operations in August due to challenges associated with repatriating U.S. dollars outside Nigeria. The country’s current macroeconomic conditions have posed difficulties for such companies, leading to strategic shifts in their operations.