• Monday, March 04, 2024
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Six Nigerian firms shut down in 10 months

Six Nigerian firms shut down in 10 months

In the 10 months to December 2023, six Nigerian companies stopped operations in the country due to its tough business environment.

Lingering issues such as foreign exchange scarcity, inadequate power supply, port congestion, multiple taxation, insecurity, and deficient infrastructure have affected many businesses, especially in the manufacturing sector.

Apart from the local companies, several foreign operators announced plans to exit Africa’s biggest economies last year. They are GlaxoSmithKline Consumer Nigeria, Equinor, Sanofi, Bolt Food and Procter & Gamble.

“It is not only the multinational companies that are leaving but the indigenous ones as well who are also finding it difficult to survive and they need to be supported,” Adeola Adenikinju, a professor of economics and president of the Nigerian Economic Society, said.

“The government must do everything they can to communicate with the people and industrialists to know their plans to take the economy from this difficult position and to find a way to reduce the harsh business environment,” he added.

Over the past seven months, the country’s inflation rate has accelerated to the highest in 18 years largely on the back of the Federal Government reforms such as the removal of petrol subsidy and naira devaluation.

According to the National Bureau of Statistics (NBS), inflation rose to 28.2 percent in November last year from 27.33 percent in October.

The latest Purchasing Managers’ Index (PMI) by Stanbic IBTC Bank also showed that the headline index rose to 52.7 in December, the highest in six months from 48.0 in November.

More details on the local companies

Mayor Biscuits Company Limited (MABISCO)

MABISCO, an indigenous biscuits company in Ogun State ceased operations in March.

Established in 2016, the company had over 300 distributors nationwide, boasting a manufacturing capacity of 3.5 tonnes per hour and packing machines handling 350 packs per minute.

54Gene

54Gene, a genomics startup shut down in September, ending its 4-year existence in which it has raised $45 million in three funding rounds.

The company’s death in September culminated in a tumultuous year in 2022 where it had three CEOs, a series of complaints from staff and other legal issues.

Lazarpay

In April, Lazerpay, a web3 and crypto payment company, closed after two years due to a lack of funds.

The company operated for only two years before calling it quits.

Jubilee Syringe Manufacturing Company

Jubilee Syringe Manufacturing Company which was inaugurated in 2017 by former Vice President Yemi Osinbajo, recently ceased operations in December, citing unforeseen circumstances affecting business operations.

Although production had halted several months ago, the company carried out in December what it described as temporary redundancy of staff to ensure the long-term sustainability of the business.

DropX

DropX, a delivery-oriented startup founded in 2021, closed its operations in December amid challenging economic conditions for startups.

The startup, founded by Praise Alli-Johnson and Oluwatope Liasu in 2021, began with a plethora of plans to achieve their goals – to connect businesses and individuals with swift and reliable delivery services.

Okadabooks

Okadabooks, a pioneer in digital publishing and bookselling, shut down in November after 10 years, attributing it to insurmountable challenges in the rough macroeconomic conditions.