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Report: More multinational corporations may leave Nigeria in 2024

Published

11 months ago

January 12, 2024

A report by a financial solutions firm, Cardinal Stone, has claimed that more multinational firms in the Fast Moving Consumer Goods subsector may exit the country in 2024.

Nigeria’s potential for broad economic growth is being hampered by its poor infrastructure. Recently, foreign businesses have been departing the nation, and producers are already grumbling about the new year.

According to the report, titled, “Strategic Resilience: Sailing Through Business Disruptions,” businesses in the fast-moving consumer goods industry would continue to face high operating costs.

The report read in part: “In 2024, we expect companies to continue to re-imagine their operational strategies to achieve cost efficiency.

“We also see legroom for more collaboration between FMCGs to boost economies of scale, product portfolio diversification, revenue and cost synergies, technological innovations, and financial power of the resultant entity”.

The report states that fluctuations in commodity prices, exchange rates, import and clearing duties, and freight costs continue to have a significant impact on the FMCG industry.

“The alternative path may eventually degenerate to exit from the operating environment or high-cost segments, similar to the cases with Procter and Gamble, GSK, Pernord Ricord, and Unilever.”

Barring a shock to the naira’s appreciation, the report further projected that the drag from rising energy costs would persist beyond 2024, borrowings may also increase as a result of the combined effect of rising dollar-denominated debts that may experience a spike in value when converted to naira, as well as rising naira operating and machinery costs that are intended to be paid for with foreign exchange.

The report also stated that “the knock-on effect of these changes could translate into an increase in effective interest rates.”

Related Topics:Featured FMCG Multilateral Nigeria

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IMF mission concludes 4th loan program assessment in Egypt

Published

23 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.