VenturesNow

Exit by multinational companies to cost Nigeria $335 million in FDI

Published

1 year ago

December 7, 2023

Nigeria’s economy is expected to lose $335 million (about N310 billion) in foreign direct investment (FDI) owing to continued exit by multinational companies.

Recently, the country has suffered the exit of high-profile firms amidst rising operation costs. The sum reflects the combined asset value of the most recent exit announcements made by Equinor, a major global player in the upstream oil sector, and Procter & Gamble, a major global player in the Fast Moving Consumer Goods, or FMCG, segment.

The American multinational consumer goods company, Procter & Gamble (P&G), is winding down its on-the-ground presence in Nigeria, while Equinor is also leaving after selling its Nigerian business, including its share in the Agbami oil field to Nigerian-owned Chappal Energies. P&G plans to switch from local production to solely importing its products.

Explaining the decision, Andre Schulten, chief financial officer, P&G, said the decision was a result of “the challenging business environment in Nigeria, as well as the difficulty in creating US dollar value”.

Equinor’s Senior Vice President for Africa Operations, Nina Koch, maintained, “Nigeria has been an important part of Equinor’s international portfolio over the past 30 years, but the transaction becomes necessary as it would enable it to “realise the value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas.”

A few months ago, GlaxoSmithKline Consumer Nigeria Plc, a company that developed and manufactured innovative pharmaceutical medicines, vaccines, and consumer healthcare products, shut down its operations in Nigeria, leading to the loss of jobs and ultimately causing a surge in the prices of drugs.

Nigeria’s underdeveloped power sector is a bottleneck to broad-based economic development and forces most businesses to generate a significant portion of their electricity. It has also been a major factor in capital flight from the West African country, Africa’s largest economy.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

11 hours ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”

VenturesNow

Tanzania tells IMF economy projected to grow by 6% in 2025

Published

13 hours ago

December 20, 2024

Ifeoluwa Dada

Tanzania’s economy is expected to grow by about 6% in 2025 from an estimated 5.4% growth in 2024, its finance minister and central bank governor said in a letter to the International Monetary Fund (IMF).

Some of the potential risks to the performance in the near term would include intensification of regional conflicts, increased commodity price volatility, a global economic slowdown and natural disasters related to climate change, Finance Minister, Mwigulu Nchemba, and Central Bank Governor, Emmanuel Tutuba, said.

Real GDP increased by 5.3% in 2023 from 4.7% in 2022, propelled by private investments on the demand side and manufacturing, construction, and agriculture on the supply side.

Strict monetary policy and moderate food and energy prices contributed to the decline in inflation from 4.3% in 2022 to 3.8% in 2023. In 2023, the Tanzanian shilling lost 8% of its value due to a lack of foreign exchange.