Why Netflix is exiting Nigeria

Diaspora Digital Media understands that Netflix has decided to quit Nigeria.

The company’s decision to abandon the Nigerian market is triggered by the country’s economic woes corroborated by recent inflation data from the National Bureau of Statistics.

Officials at the major on-demand movies channel told reporters on Wednesday evening that the worsening economic situation in Nigeria triggered the decision.

“We’re exiting the Nigerian market,” an official said under anonymity, pending an official announcement.

“We’ve lost too many paying subscribers, and the exchange rate of naira against the American dollar also did not help us in any way.”

The development came barely six years after Netflix entered Africa’s largest economy with the production of Lionheart, which was touted as heralding a new era of high-quality cinema production in the country.

Since 2018, the Nigerian Nollywood industry has cheerfully embraced Netflix, which helped spread Nigeria’s creative work to a global audience.

Although the company has also reported a downward trend in subscriptions in other markets, it has persevered until now, with Nigeria appearing to be the first major country to lose the premium entertainment the U.S.-based company offers.

Increase in subscription rate led to loss of subscribers

The company, in July 2024, announced a 40% increase in its subscription prices in Nigeria, marking the second price hike this year.

With citizens facing inflation and a high cost of living, loss of subscribers set in.

Exodus of foreign firms 

The Nigerian economy has witnessed a significant exodus of foreign firms in recent times. Several multinational corporations have exited the Nigerian market, citing various challenges.

Diageo, a UK-based alcoholic beverage giant, partially exited Nigeria by selling its 58.02% stake in Guinness Nigeria to Tolaram Group for $70 million in June 2024.

Similarly, Microsoft announced the closure of its Africa Development Center in Lagos, Nigeria, in May 2024, marking a significant shift in its operations.

Other foreign firms that have exited the Nigerian market include Unilever Nigeria PLC and Procter & Gamble Nigeria, which cited low consumer demand and currency issues as reasons for their departure.

ShopRite Nigeria, Bolt Food, and Jumia Food Nigeria have also closed their operations in Nigeria. Furthermore, Bayer AG, Sanofi SA, and Kimberly-Clark Corporation have exited the Nigerian market, while PZ Cussons, a British group, delisted from the Nigerian stock market due to “foreign exchange challenges”.

These exits are largely attributed to Nigeria’s economic challenges, including currency devaluation, inflation, and infrastructure deficiencies.

The departure of these foreign firms has significant implications for the Nigerian economy, including job losses and reduced investment.

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