PZ Cussons to leave Nigeria after N87b loss over forex disaster

PZ Cussons Nigeria is gearing to leave Nigeria following a loss of a staggering N87 billion due to the disaster witnessed from foreign exchange in the country.

PZ Cussons is a Nigeria-based company engaged in the manufacture, distribution, and sale of a range of consumer products and home appliances.

These products and home appliances include Carex, Premier Soap and Morning Fresh liquid soap.

Other are Robb ointment, Mamador, and a host of baby products, to mention but few.

According to a BusinessDay report, the combined net asset position of five multinationals was N309.14 billion in 2022, but fell 68 percent to N99.8 billion as at the end of 2023.

The affected companies include the Cadbury, PZ Cussons, Unilever, Guinness and Nigerian Breweries.

PZ Cussons Nigeria is the only company with numbers reported as of November 2023.

The report further noted that shareholders of PZ Cussons Nigeria and Cadbury Nigeria were the worst hit.

Both firms recorded negative net assets of N23.2 billion and N15 billion respectively, Diaspora Digital Media learnt.

The outcome marks the first time the company’s total liabilities exceed total assets in their long history of doing business in Nigeria.

What caused the N87 billion loss to PZ Cussons?

PZ Cussons specifically attributed the negative net asset position to a N87 billion loss from foreign currency-denominated trade obligations.

The trade obligations led to an operating loss of N73.8 billion for the company in the period.

Consequently, the company announced plans to leave the Nigerian market scene to its stakeholders.

Which companies left Nigeria before PZ Cussons?

If and when it eventually leaves, PZ Cussons will join the likes of Procter & Gamble (P&G) and GlaxoSmithKline (GSK) that left Nigeria.

Recently, GlaxoSmithKline announced that it is leaving Nigeria after 51 years of doing business in the largest African market.

GSK is a leading pharmaceutical company that distributes various medicines, including vaccines, in Nigeria.

It was incorporated in 1971, while it was listed on the Nigerian Stock Exchange in 1972.

On the 3rd of August 2023, it officially announced its exodus from Nigeria and unveiled its plan to adopt a 3rd party distribution model.

Over the last few years, there has been a worrisome consistent increase in the exit of multinationals from Nigeria.

Nigeria has witnessed the likes of Mufex, Framan Industries, Surest Foam Limited, MZM Continental, Moak Industries, Stone Industries, Nipol Industries, and Procter & Gamble exit or reduce their involvement in the market.

PZ Cussons may be the latest in the long list.

What Nigerian Government must do to save businesses

Experts have highlighted measures that the federal government needs to take to tackle the rising uncertainty in the country.

1. “Put our priorities right.”

The Presidential Candidate of the Labour Party in the February 25th general election, Mr. Peter Obi, said that Nigeria is suffering from “clear misplacement of priorities“.

Reacting to the 2024 federal government budget proposal, Mr. Obi wondered why it’s difficult for the country to put its priorities right, and urged the government to do more.

2. Set up economic team of real economists, not politicians.

The national president of the Association of Small Business Owners of Nigeria (ASBON), Femi Egbesola, made the call while addressing matters of inflation.

Mr. Egbesola urged the government to set up an economic team of people who are real economists, not politicians.

He advised the team to review all the policies, particularly the economic ones, if the country hopes to get it right.

3. Stabilise macroeconomic environment.

The chief executive officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the government can help businesses by stabilising the macroeconomic environment.

What else can Government do to save businesses?

4. Address inflation and high cost of living.

The president of the Nigerian Economic Society (NES), Mr. Adeola Adenikinju, advised the Nigerian government to address inflation and the high cost of living.

To do this, Adenikinju called on government to implement measures to alleviate the burden on vulnerable persons experiencing severe financial difficulties.

5. Ease the difficulties of doing business.

The Chairman of Lagos Branch of the Nigerian Medical Association (NMA), Dr. Benjamin Oluwatosin Olowojebutu, urged the Nigerian government to ease the difficulties of doing business in Nigeria.

According to him, manufacturers and business owners need an enabling economic environment to thrive.

He said that the government must do more than it currently does to identify and ease the difficulties associated with doing business in Nigeria.

6. Erring government officials must be punished.

Dr. Olowojebutu also sought punitive measures for erring government officials.

He said that such measures must be meted out to erring government officials caught sabotaging government efforts.

“Personal gains must not be allowed to negate national benefits,” he said, adding that “closer monitoring must be given to government agencies like NAFDAC, SON, etc.”

His other suggestions include:

7. Better trade negotiation.

Olowojebutu urged Nigeria to devise a better trade negotiation with existing and incoming foreign investors.

“Creating an enabling ambience for business is different from permitting extortion and manipulation.

“We must ensure knowledge sharing to enhance technological development and sternly prevent our nation from being a dump site for foreign manufacturers,” he said.

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