Consumer goods giant Procter & Gamble has announced plans to dissolve its on-ground operations in Nigeria and transition to an import-only business model.

The decision was disclosed by the Chief Financial Officer of P&G, Andre Schulten, during his presentation at the Morgan Stanley Global Consumer & Retail Conference.

Explaining the rationale behind the move, Schulten emphasized the challenges faced by a dollar-denominated organization in the Nigerian market.

He stated, “The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create U.S dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment.”

Detailing the restructuring program, Schulten highlighted that the focus would primarily be on Nigeria and Argentina.

He stated, “We’ve announced that we will turn Nigeria into an import-only market, effectively dissolving our footprint on the ground in Nigeria and reverting to an import-only model.”

P&G emphasized that the strategic decision would enable the company to concentrate on markets with the highest potential.

Responding to inquiries about the impact of the restructuring on the overall group’s portfolio, Schulten clarified that Nigeria contributes $50 million in net sales to the company, representing a fraction of its $85 billion overall portfolio.

As such, P&G anticipates no significant material impact on the group’s balance sheet in terms of sales or profitability.

The macroeconomic conditions in Nigeria have posed challenges for foreign USD-denominated companies, with P&G joining the likes of drug maker GSK in revising its operational strategy in the country.

GSK had earlier announced the cessation of operations in Nigeria, appointing a third party for distributions.

One of the primary challenges cited by these companies is the difficulty in repatriating U.S. dollars outside Nigeria, exacerbated by a reported forex backlog of around $7 billion acknowledged by the Central Bank.