Economy
After 75 Years, Guinness Leaves Nigeria, Cites Harsh Economic Climate
Guinness has announced a plan to leave Nigeria after 75 years as Nigeria’s inflation wreaks economic havoc
Guinness will join a long list of multinationals, like GlaxoSmithKline and Microsoft, that have left Nigeria, citing the harsh economic climate as making business unprofitable.
After operating in Nigeria since 1950 and enduring a torrid economic climate on the back of President Bola Tinubu’s administration, Guinness has announced it will exit the Nigerian market and sell off its controlling shares to Singaporean conglomerate Tolaram Group on Tuesday.
The brewery brand recorded a staggering N61.9 billion loss after tax between July 2023 and March 2024, just a few months after the Nigerian government floated the naira in an effort to unify the currency’s value on the official and parallel foreign exchange markets.
The Company’s products
But the move backfired and caused many multinational companies to suffer huge financial setbacks including Guinness Nigeria whose N61.7 billion loss after tax in Q3 was a 1,000 per cent decrease from the N5.9 billion profit generated in the same period last year.
The loss exacerbated by the naira’s continued downward trend may have informed Diageo, Guinness’ parent company, to sell its 58.02 per cent majority stake to the Singaporean group.
“Under the terms of an agreement signed today, 11 June 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands,” the company said in a statement Tuesday.
Guinness Nigeria Plc, a public limited liability company quoted on the Nigerian Stock Exchange, was incorporated on April 29, 1950, as a trading company importing Guinness Stout from Dublin.
The Guinness brand has operated in Nigeria since 1950, but with Tolaram’s controlling stake acquisition expected to conclude by 2025, the global brewery brand will have spent 75 years in Nigeria.
In the statement, Guinness said the firm would leave Nigeria next year and hand over to a third-party venture.
“The transaction is expected to be completed during fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria,” said the statement signed by Abidemi Ademola, Guinness’s legal director.
Diageo, however, stated that the sale of its Nigerian brand would not in any way affect its ownership of the Guinness global brand.
Diageo “will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term.”
Diageo’s exit adds to a long list of other multinational companies, like GlaxoSmithKline and Microsoft, that have left Nigeria in the last one to two years, citing the harsh economic climate as making business unprofitable.
Some of Diageo’s popular brands in Nigeria include Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.
By Sule Musa
. . .
A total sum of N 1.203 trillion August 2024 Federation Accounts Revenue has been shared to the Federal Government, States and Local Government Councils in the country.
The revenue distribution was announced at the September 2024 meeting of the Federation Accounts Allocation Committee (FAAC), in Abuja.
The N1.203 trillion total distributable revenue comprised distributable statutory revenue of N186.636 billion, distributable Value Added Tax (VAT) revenue of N533.895 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.017 billion and Exchange Difference revenue of N468.245 billion.
Sakirat Oluwatoyin Madein
Accountants-General of the Federation
A communiqué issued by the Federation Accounts Allocation Committee (FAAC) indicated that total revenue of N2.278 trillion was available in the month of August 2024. Total deduction for cost of collection was N81.975 billion while total transfers, interventions and refunds was N992.617 billion.
According to the communiqué, gross statutory revenue of N1.221 trillion was received for the month of August 2024. This was lower than the sum of N1.387 trillion received in the month of July 2024 by N165.994 billion
Gross revenue of N573.341 billion was available from the Value Added Tax (VAT) in August 2024. This was lower than the N625.329 billion available in the month of July 2024 by N51.988 billion.
The communiqué stated that from the N1.203 trillion total distributable revenue, the Federal Government received total sum of N374.925 billion and the State Governments received total sum of N422.861 billion. The Local Government Councils received total sum of N306.533 billion and a total sum of N99.474 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
On the N186.636 billion distributable statutory revenue, the communiqué stated that the Federal Government received N71.624 billion and the State Governments received N36.329 billion. The Local Government Councils received N28.008 billion and the sum of N50.675 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
From the N533.895 billion distributable Value Added Tax (VAT) revenue, the Federal Government received N80.084 billion, the State Governments received N266.948 billion and the Local Government Councils received N186.863 billio
A total sum of N2.252 billion was received by the Federal Government from the N15.017 billion Electronic Money Transfer Levy (EMTL). The State Governments received N7.509 billion and the Local Government Councils received N5.256 billion.
From the N468.245 billion Exchange Difference revenue, the communiqué stated that the Federal Government received N220.964 billion and the State Governments received N112.076 billion. The Local Government Councils received N86.406 billion, while the sum of N48.799 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
In August 2024, Oil and Gas Royalty, Petroleum Profit Tax (PPT), Value Added Tax (VAT), Import and Excise Duties, Electronic Money Transfer Levy (EMTL), CET Levies and Companies Income Tax (CIT) all recorded decreases.
The balance in the ECA was $473,754.57
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