Francis Meshioye, President of the Manufacturing Association of Nigeria (MAN), has stated that if an electricity spike is adopted, more multinational corporations will leave Nigeria.
Despite offering multinational businesses the largest market on the continent, Nigeria had serious economic downturn decisions that were frequently triggered by growing company costs, epileptic power supplies, and insufficient infrastructure support, among other factors.
“With justification, the chamber is concerned that if the trend continues, the nation’s economic growth potential will not be realized,” Almona added. GlaxoSmithKline’s decision reflects negatively on the country’s low standing on ease of doing business indicators, something the chamber has often emphasised. It is past time for the government to take adequate steps to change the depressing trends in Africa’s largest market’s business climate.
“Business people take factor cost very seriously as an integral component of the profit equation. In the face of escalating prices, company owners will most likely seek out more cost-effective sites. The chamber believes the government should take a comprehensive look at the economic environment and make efforts to make the nation’s business climate more competitive for growth.”
Adewale-Smatt Oyerinde, the DG of NECA, declared in Lagos, “The recent trend of business relocation and divestment is unfortunate. Various government policy initiatives have had a negative impact on the private sector during the previous decade. Many of these measures were anti-growth, poorly planned, or poorly thought out, while others were out of step with the country’s economic reality. In more complicated circumstances, we saw an age of policy disputes and inconsistencies, as well as regulatory and legislative strangling of firms, leaving many businesses without a clear route for planning and decision-making. Operational expenditures have skyrocketed, adding to the troubles of many businesses.”
Further, the DG stated, “The consequences of years of bad policy decisions are not far-fetched. Divestment, capital flight, and outright closures have become the ‘new normal’ in the corporate world, as projected. This is one of the primary reasons why the unemployment rate continues to climb indefinitely, resulting in an increase in crime and other security challenges. When firms discontinue operations, divest, or relocate to more profitable and welcoming locations, a substantial number of Nigerians lose their jobs. Inadvertently, the government loses tax revenue, social investment is hampered, and poverty reigns.”
While calling for more decisive and immediate action, Oyerinde added, “It is pertinent to state that the government must take immediate steps to arrest this predicament. While we recognise and applaud the present administration’s efforts to address private-sector concerns as well as the initiatives it has taken to give some relief to firms in key areas of the economy, more needs to be done.
Beyond tax reform activity and the provision of palliatives to select corporate entities, the government should provide the right intervention and incentive not only to attract more foreign direct investment (FDI), but also to prevent more companies from shutting down, divesting, or leaving the country.”
NECA, LCCI, and NACCIMA asked the government to engage with the private sector to design and implement action plans capable of enhancing enterprise sustainability and competitiveness.
Aside from international firms, numerous domestic firms are closing down due to the tough operating environment.
This is also causing enormous job losses in a country with an unemployment rate of more than 35%.
Senator Walid Jibrin, a former Chairman of the Textile Manufacturers Association of Nigeria (TMAN), recently told reporters that just 20 of the country’s 175 textile enterprises were operational, with others having to close.
The National President of the Poultry Association of Nigeria (PAN), Sunday Ezeobiora, said the poultry business has also suffered a downturn in recent months due to the growing price of maize.
