Pick n Pay Shuts Down Nigerian Operations

Nigeria's Economic Woes Claim Pick n Pay

Currently, Pick n Pay operates two stores in Nigeria...

Nigeria's Business Decline: 60 Multinationals Exit, ₦94 Trillion Output Lost. Recent departures include Microsoft, PZ Cussons, and Kimberly-Clark, fueling economic concerns.

Pick n Pay, a prominent South African grocery retailer, has announced its departure from Nigeria. As part of its restructuring strategy outside its home market, the company will sell its 51% stake in its Nigerian joint venture.

CEO Sean Summers made the announcement on October 28, marking a significant decision less than five years after Pick n Pay's entry into Nigeria. The company had partnered with A.G. Leventis in 2016 to establish its presence in the country.

Currently, Pick n Pay operates two stores in Nigeria. However, its exit underscores the growing challenges faced by international companies in the country, contributing to a trend of withdrawals.

This move aligns with Pick n Pay's efforts to refocus on its core South African market and optimize its international operations.

The exit of Pick n Pay follows a series of international companies withdrawing from Nigeria, citing operational challenges and economic uncertainty.

Nigeria has witnessed a significant withdrawal of multinational corporations in recent years, with many opting to either divest their stakes or downsize operations. A prominent example is Diageo, which offloaded its 58.02% stake in Guinness Nigeria to Tolaram Group on June 11, 2024.

This trend continues, as President Bola Tinubu recently approved the transfer of ExxonMobil's shares to Seplat Energy. This exodus has severe economic implications.

According to Dr. Vincent Nwani, economist and former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry, Nigeria's economy has suffered a staggering ₦94 trillion loss in output over the past five years due to the departure of these multinationals.

Dr. Vincent Nwani, economist and former Director of Research and Advocacy at the Lagos Chamber of Commerce and Industry, revealed an alarming trend of company exits in Nigeria. In 2020, over 10 companies ceased operations, including:

• Standard Biscuits Nigeria Ltd
• NASCO Fiber Product Ltd
• Union Trading Company Nigeria PLC
• Deli Foods Nigeria Ltd

The following year, 2021, saw more than 20 companies exit the market, including:

• Tower Aluminium Nigeria PLC
• Framan Industries Ltd
• Stone Industries Ltd
• Mufex Nigeria Company Ltd
• Surest Foam Ltd

In 2022, over 15 well-known brands departed Nigeria:

• Universal Rubber Company Ltd
• Mother's Pride Ventures Ltd
• Errand Products Nigeria Ltd
• Gorgeous Metal Makers Ltd

The exodus continued in 2023, with more than 10 major companies exiting:

• Unilever Nigeria PLC
• Procter & Gamble Nigeria
• GlaxoSmithKline Consumer Nigeria Ltd
• ShopRite Nigeria
• Sanofi-Aventis Nigeria Ltd
• Equinox Nigeria
• Bolt Food & Jumia Food Nigeria

The first half of 2024 witnessed the departure of five major listed companies:

• Microsoft Nigeria
• Total Energies Nigeria (due to divestment)
• PZ Cussons Nigeria PLC
• Kimberly-Clark Nigeria
• Diageo PLC

These departures have contributed to the staggering ₦94 trillion loss in output for the Nigerian economy over the past five years.