Conglomerates industry in Nigeria has suffered significant setbacks, with listed firms under the sector experiencing a loss of over 80% in share price due to issues such as inflation, poor infrastructure, and a harsh operating environment. Stocks under the sector have plummeted since 2015 due to low investor confidence.
For instance, UAC of Nigeria’s stock price fell from N43 in 2015 to N8 in 2023, while SCOA Nigeria’s stock price fell from N4.16 kobo in 2015 to 99 kobo due to heavy financing and operating costs. The harsh economic environment has affected the fortunes of Unilever Nigeria Plc as well, with the stock price dropping from N40 in 2015 to 13.50 kobo in 2023.
The inflation rate in Nigeria has increased to 22.04% in March 2023, which is the highest since 2009. Conglomerate firms have been affected by increasing inflation rates, which have resulted in escalating costs, particularly energy, distribution, and finance costs.
As a result, companies are finding it difficult to sustain their profitability, with firms under the sector considering relocating to neighboring countries due to Nigeria’s dwindling business condition.