P&G to Depart Nairobi in June 2024: A Confluence of Challenges Pushes Global Giant Out

Nairobi, Kenya - December 15, 2023: American consumer goods giant Procter & Gamble (P&G) is set to exit Nairobi in June 2024, citing a confluence of economic challenges that have hampered its Kenyan operations. The company's decision, confirmed by sources within the Ministry of Labour, comes just a week after P&G announced its withdrawal from Nigeria, marking a strategic shift in its African footprint.

Steep Costs, Currency Woes, and Market Contraction:

Sources close to P&G revealed that the decision to leave Nairobi was driven by a complex interplay of factors:

• High Cost of Doing Business: "Kenya's business environment has become increasingly expensive," confided a source on condition of anonymity. "From logistics and raw material costs to energy and regulatory fees, the entire operational spectrum has grown prohibitive."
• Dollar Shortages: The persistent scarcity of US dollars, crucial for importing essential materials and equipment, further squeezed P&G's margins. "Dollar fluctuations and access have crippled our ability to operate efficiently," the source added.
• Slumping Sales: A significant decline in P&G's Kenyan sales compounded the existing challenges. "The market has contracted considerably, making it unsustainable for us to maintain our presence," the source explained.

Echoes of Nigeria's Exodus:

P&G's Nairobi exit follows its recent announcement to pull out of Nigeria, another key African market. In both cases, the company cited similar challenges of a tough operating environment and declining sales. The synchronized exits raise concerns about the broader attractiveness of the African market for multinational corporations.

Impact on Jobs and Local Economy:

P&G's departure from Nairobi will inevitably impact the local economy. While the exact number of job losses remains unclear, P&G employs hundreds of people in Kenya through its manufacturing and distribution operations. Additionally, the company's withdrawal could affect suppliers and distributors reliant on its business.

Uncertainty Looms for East Africa:

With P&G pulling out of both Kenya and Nigeria, questions swirl about the company's future prospects in East Africa. While P&G remains committed to other African markets, its recent decisions signal a cautious approach to navigating the continent's complex economic realities.

The P&G withdrawal from Nairobi underscores the challenges facing multinational corporations in Africa. High costs, currency fluctuations, and market uncertainties present formidable obstacles, demanding strategic reassessments and potentially prompting further exits in the months and years to come.