GlaxoSmithKline Consumer Nigeria Plc (GSK) announcing its intention to shut down operations in Nigeria has raised concerns among industry experts. This move is seen as a potential catalyst for other foreign companies to exit the country due to ongoing economic challenges and unfavorable policies affecting business viability.

GSK, renowned for its innovative pharmaceuticals, vaccines, and consumer healthcare products, cites its parent company’s plan to halt the commercialization of prescription medicines and vaccines through its Nigerian subsidiary. This decision follows a series of similar actions by multinational corporations adjusting strategies in response to challenging economic conditions.

Unilever Nigeria’s emphasis on “business continuity measures that reduce exposure to devaluation and currency liquidity” is an example of this trend, along with the planned halt of production for popular brands like Omo, Sunlight, and Lux. The Central Bank’s decision to allow free-flowing exchange rates has further compounded the challenges for multinational companies, with the Nigerian naira depreciating against the dollar.

The Association of Community Pharmacists of Nigeria (ACPN) expressed disappointment at GSK’s exit, warning of potential future departures. ACPN’s National Chairman, Adewale Oladigbolu, highlights GSK’s intricate ties with local pharmacies and cautions that a less scientifically oriented company could replace GSK, impacting both the commercial and scientific aspects of the pharmaceutical sector.

Oladigbolu emphasizes GSK’s exit due to a shortage of foreign exchange, noting that the company’s inability to transfer funds to its parent company over the past two and a half years has broader implications, affecting sectors like airlines.

Economics expert, Professor Sheriffdeen Tella, attributed the trend of foreign company exits to a combination of high interest rates, energy costs, and volatile exchange rates. These challenges collectively hinder domestic production and competitiveness.

GSK’s decision aligns with a growing pattern of businesses finalizing shutdown plans or closing doors. Nigeria Employers Consultative Association’s Director-General, Mr. Wale Oyerinde, underscores the unfavorable operating environment faced by businesses, driven by persistent challenges.

The Lagos Chamber of Commerce and Industry (LCCI) echoes these concerns, highlighting the adverse impact of multinational firms’ decisions on the economy. LCCI’s Director-General, Dr. Chinyere Almona, stressed the urgency for government intervention to address rising operational costs, inadequate infrastructure, and inconsistent power supply to foster a more competitive business environment.

With GSK’s exit raising concerns, the fate of foreign companies in Nigeria hangs in the balance. Hopes rest on strategic reforms that can navigate challenges and promote sustainable business operations.