Pick n Pay becomes latest international company to exit Nigeria amid restructuring

A South African grocery retailer Pick n Pay has sold off a 51% share of its joint venture, exiting the Nigerian market to focus on planned restructuring outside its home market.

The Chief Executive Officer (CEO) of Pick n Pay, Sean Summers, announced the decision on Monday, October 28, 2024.

The development came less than five years after the company forayed into the Nigerian market through a partnership with A.G. Leventis (Nigeria), boasting two stores.

Pick n Pay’s restructuring move adds to the growing number of international companies either taking flights from the country or divesting their investments to other markets.

Several multinationals have exited Africa’s most populous country either by scaling down operations, transferring ownership or selling off their stakes, with the most recent being the sale of beverage company Diageo’s 58.02 per cent shareholding in Guinness Nigeria to Tolaram Group on June 11, 2024.

Like Pick n Pay, like Jumia

Another South African retailer, Shoprite also announced the closure of its Abuja store in June, after a thorough evaluation of the store’s financial situation and the current business climate.

This came after Shoprite shut down its Kano store in January this year.

Last December, Jumia announced the shutdown of its food delivery business, Jumia Food, in Nigeria.

The company said the decision became necessary after a thorough review revealed that the current market conditions and the general operating environment make the food delivery business unsustainable.

Other multinationals that have exited Nigeria due to a challenging business environment include GlaxoSmithKline (GSK) Consumer Nigeria Plc, Procter & Gamble, Sanofi, and Kimberly-Clark.

Nigeria counts the cost of multinationals’ exit

The exodus of multinationals from the Nigerian economy has cost the West African giant a N94 trillion loss of output in five years.

This is according to an economist and former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry in Nigeria, Dr Vincent Nwani.

The analyst observed that over 10 companies shut down operations in 2020 most notably: Standard Biscuits Nigeria Ltd, NASCO Fiber Product Ltd, Union Trading Company Nigeria PLC and Deli Foods Nigeria Ltd, per Channels TV.

In 2021, Nwani said more than 20 companies exited, including Tower Aluminum Nigeria PLC, Framan Industries Ltd, Stone Industries Ltd, Mufex Nigeria Company Ltd and Surest Foam Ltd.

In 2022, over 15 known brands left Nigeria, including Universal Rubber Company Ltd, Mother’s Pride Ventures Ltd, Errand Products Nigeria Ltd and Gorgeous Metal Makers Ltd.

Nwani added that over 10 major companies left in 2023, notably Unilever Nigeria PLC, Ltd, Sanofi-Aventis Nigeria Ltd, Equinox Nigeria and Bolt Food & Jumia Food Nigeria.

In the first half of 2024, no fewer than five listed major companies had left Nigeria, including Microsoft Nigeria, Total Energies Nigeria (affected by its divestment), PZ Cussons Nigeria PLC, Kimberly-Clerk Nigeria and Diageo PLC.