Danone Bets Big on Nigeria Amid Multinational Exodus

As economic reforms shake Nigeria’s business landscape, French food and beverage giant Danone is taking a contrarian stance. While several multinational companies have exited or scaled down their operations due to currency devaluation and soaring inflation, Danone is doubling down on its presence in Africa’s most populous country. The Paris-based conglomerate is banking on what it sees as long-term growth potential in Nigeria, a nation of over 200 million people and one of Africa’s largest consumer markets. At the Africa CEO Forum held in Abidjan, Christian Stammkoetter, Danone’s head for Asia, the Middle East, and Africa, voiced optimism about Nigeria’s economic trajectory.

“We are convinced about the potential of Nigeria,” Stammkoetter said in an interview with Semafor. “We will continue doubling down through innovation and expansion of our routes to market.”

Danone, which has long operated in Nigeria through its Fan Milk brand, is now investing in expanding its milk distribution infrastructure, particularly in northern Nigeria. This is part of a strategic effort to lower operational costs and improve profit margins in a high-inflation economy.

Why Danone’s Confidence Stands Out

Danone’s bullish stance on Nigeria is remarkable, especially when viewed against the backdrop of an exodus by other multinational giants. In recent years, at least nine global firms have exited Nigeria due to what they described as an unsustainable business environment. These include GlaxoSmithKline (GSK), Procter & Gamble (P&G), and Unilever—all citing the unpredictability of economic reforms and foreign exchange challenges as major deterrents. For example, P&G, once the largest non-oil U.S. investor in Nigeria, shut down its $300 million manufacturing operation in Agbara, Ogun State in 2017. Although the company has retained its physical assets, those facilities are now primarily used for import activities. At a 2023 investor conference, P&G CFO Andre Schulten confirmed the shift away from local production due to “challenging business conditions.” What sets Danone apart is its commitment to localization and market adaptation. While others have retreated, Danone is enhancing its supply chain, innovating product offerings, and pushing into underserved markets within Nigeria. The company’s focus on rural distribution networks and dairy production infrastructure reflects a long-haul strategy, not just survival through the current economic turbulence.

Is Nigeria’s Market Worth the Risk?

One of the strongest arguments for staying invested in Nigeria is its demographic edge. With a median age of just 18 years, Nigeria has one of the youngest populations globally, presenting vast opportunities for brands targeting emerging middle-class consumers. According to projections by the United Nations, Nigeria will surpass 400 million people by 2050, becoming the third most populous country in the world. In urban centers like Lagos, Kano, and Port Harcourt, the growth of tech-enabled retail, mobile money, and fast-moving consumer goods (FMCG) demand is creating pathways for companies to scale even without relying on legacy infrastructures. Danone’s investments in cold chain logistics and localized dairy production position it to tap into this growth efficiently. This demographic dynamism also feeds into Nigeria’s increasing consumer resilience. Despite economic hardships, Nigerian consumers tend to prioritize essential products such as food, beverages, and personal care—areas where Danone excels.

A Rebound in Confidence

Danone’s expansion comes as Nigeria shows early signs of economic stabilization. The Central Bank of Nigeria (CBN) data for May 2025 indicates a slow but encouraging rebound of the naira. Over the first eight trading days of the month, the naira appreciated by N2.15, trading at N1,600.03 per dollar in the Nigerian Foreign Exchange Market (NFEM), a slight improvement from N1,602.18 at the beginning of the month. In the parallel market, often viewed as a more accurate barometer of currency sentiment, the naira has also stabilized, trading between N1,600 and N1,625 per dollar. Inflation, while still high, has reportedly started to moderate following fiscal tightening and reforms initiated by the Bola Tinubu administration nearly two years ago. Though these reforms—including the floating of the naira and the removal of fuel subsidies—initially triggered inflationary pressures and business uncertainty, investors like Danone are interpreting the recent economic indicators as signs of a potential turnaround.