Multinational J&J, plans to exit Nigeria amid operational challenges, others

Nigeria’s fragile economy has suffered another setback, despite the Federal Government’s claims that the country’s economy is stabilizing, as Johnson & Johnson Innovative Medicines (J&J), one of the world’s biggest healthcare giants, confirms plans to exit the country citing tough economic challenges.

According to a reliable source who spoke with members of the Commerce and Industry Correspondents Association of Nigeria (CICAN), the healthcare multinational has found the Nigerian environment increasingly unworkable, citing worsening economic climate occasioned by soaring inflation, foreign exchange scarcity, rising production costs, and unpredictable government policies, among others.

The source hinted that Johnson & Johnson Innovative Medicines which core services are supplying vital pharmaceutical and medical products to the Nigerian market, can no longer cope with the deteriorating business environment which has now made operations unsustainable either in the short term and long term in Nigerian business environment.

“Over the past one year, they had reduced their staff strength to more than 20 per cent shrinking significantly. In 2022, the Consumer Healthcare arm of the company had also quietly left the country in the wake of the Nigeria’s economic challenges.

“This is not just about one company leaving. When a healthcare leader like Johnson & Johnson cannot survive in Nigeria, it sends a worrying signal to other global investors,” the source added.

The company’s departure is expected to deal a decisive blow to the healthcare supply chain, probably limiting Nigerians’ access to essential medicines in the Oncology, Immunology and Mental Health spaces.

The development has risen a lot of concern given that J&J had formerly taken a step back in Nigeria in 2022, as its Consumer Healthcare division silently left the market unnoticed at the time.

One industry analyst opined that the impending closure sends a dangerous signal to other international investors bearing in mind that Nigeria is envisioned as a viable destination for their businesses, adding “It shows that Nigeria’s investment climate has become too risky and unattractive.”

Multinational companies across manufacturing, energy, food, and healthcare have been scaling back or shutting down completely due to Nigeria’s harsh operating environment and the trend, if not urgently addressed, could deepen unemployment, worsen the cost-of-living crisis, and also discourage foreign direct investment in the country.

The removal of fuel subsidies, energy crisis, limiting output and increasing the cost of locally produced goods, inflationary pressures, foreign exchange for importing raw materials, multiple taxation, harsh operating environment, blockage of repatriation of funds, exacerbating supply chain disruptions, amongst others are the reasons for their exits from the Nigerian market.