The Economic Intelligence Unit, an international business research fire has listed, corruption, cronyism, rampant insecurity and a giant infrastructure gap as prominent reason for the mass exodus of multinational in Nigeria.
The renowned body also noted that indigenous oil companies acquiring the assets of divesting international oil companies will not be able to match their investing power.
The EIU, in its latest Country Report on Nigeria, observed that the indigenous companies would not have the same financial power to invest as the multinationals, who had been the major drivers of the Nigerian oil industry since its inception.
It feared that there might be a net withdrawal of foreign direct investment (FDI) in 2024, as it happened in the previous year.
“The wider business environment will remain highly challenging, undermined by corruption, cronyism, rampant insecurity and a giant infrastructure gap.
Subscribe to our Telegram channel for the latest updates.
Follow the latest developments with instant alerts on breaking news, top stories, and trending headlines.
“Multinationals are increasingly deciding to quit Nigeria or reduce their presence; we estimate there was a net withdrawal of foreign direct investment in 2023, to be repeated in 2024 as naira losses exert pressure on balance sheets carrying large foreign liabilities,” the EIU said.
It is instructing to note that, there have been trends of foreign oil companies have concluded plans to sell their onshore oil businesses to relocate offshore.
Recently, Shell Plc said it had “reached an agreement to sell its Nigerian onshore subsidiary, The Shell Petroleum Development Company of Nigeria Limited” to Renaissance, a consortium of five companies comprising four exploration and production companies.
Also, ExxonMobil, Equinor, and Total Energies had all indicated interest in divesting their stakes in Nigeria’s onshore oilfields.
Although, Heineken Lokpobiri, the minister of state petroleum (Oil), said the divestment by some international oil companies was a win-win situation, saying it would make room for indigenous companies to develop capacity within the onshore and shallow water spaces.
Also, the Governor of Imo State, Hope Uzodinma, had accused the foreign oil firms of not being genuine investors, questioning their rationale for abandoning onshore for offshore.
