South African Billionaire and Former Chairman of Shoprite Holdings Limited, the continent’s largest grocer which left Nigeria in 2021, Christo Wiese, on Friday, opined that Nigeria’s large and growing population was impossible for businesses to ignore, noting that a recent exodus from the West African state won’t last.
Wiese, in an interview on Bloomberg TV, said, “How do you ignore an economy like this? Sooner or later the big players will enter again,” the billionaire declared.
In December, Procter & Gamble Co. also ditched Nigeria, with at least three other global conglomerates in recent months announcing they are exiting Africa’s most populous nation and second-biggest economy.
Many African countries, like Nigeria, developed as single-commodity economies which meant that when the price of that product falls, the currency and consumer spending take a hit, making it difficult for foreign investors to get a return.
“Most foreign investors, including South African investors, I think have adopted an attitude when it comes to Nigeria that it’s too early,” Wiese said. “We’ve got to wait for things to settle, for the economy to develop more and then for governments that adopt the correct policies.”
The entry of several global firms into Nigeria was heralded with fanfare.
For example, as Nigeria’s former vice president cut the ribbon on Procter & Gamble Co.’s diaper production line in 2017, the $300 million facility near Lagos, was hailed as a symbol of the country’s economic ambitions. In December, P&G said it was leaving the West African state.
The US consumer goods giant was not alone. In recent months at least three other global conglomerates have announced they are exiting Africa’s most populous nation and second-biggest economy.
Among them were GSK Plc., Bayer AG and Sanofi SA. Last year Unilever Plc cut some of the products it was manufacturing in the country. Nestle SA has posted losses from its operations.
At the heart of the exodus was a scarcity of the dollars international businesses need to repatriate earnings. The Central Bank of Nigeria (CBN) has devalued the naira twice in the past eight months and is still struggling to clear a backlog of demand for greenback companies required to pay debts and import raw materials. A near complete absence of a reliable electricity supply and congestion at Nigeria’s ports are compounding the malaise.
Sunday Ehigiator
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