Clover becomes the second South African company in two weeks to leave Nigeria. The company has blamed the financial crisis in Nigeria for its withdrawal from the Nigerian market. In a bid to maneuver its way through the financial crises, the company laid off thousands, cut production and even closed operations as they found it hard to get enough dollars to buy imported raw materials.
The weakened economy and low economic growth forecasts and commodity prices have had a consequential impact on the risks faced by Clover in the rest of Africa.
The company who had planned to invest no less than $6.43 million in developing its products in Nigeria will not be able to do so due to the current financial crisis faced by Nigeria, caused by low oil price. In order to keep its brand alive, the beverage company will be looking to do business in the rest of south eastern Africa. The group intends to continue its operations across Botswana, Namibia, Lesotho and Swaziland, and also look for export opportunities in Africa where the currency risks can be lessened.
South African fashion retailer Truworths, who also pulled out of the Nigerian market, said it did so because it was unable to import clothes and was struggling to pay rent and access foreign exchange. The current foreign exchange policy now used by the Nigerian government is said to be responsible for the withdrawal of foreign investments from the country.
Buhari’s attempt to boost local industries could also be responsible for hurting foreign investment.