• Wednesday, November 29, 2023
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Exit of multinational firms worries Nigerian business chambers

NACCIMA says AfCFTA presents opportunity for business expansion, wealth creation

The Lagos Chamber of Commerce and Industry (LCCI) and the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA) have expressed deep concern over the increasing exodus of international manufacturing companies from Nigeria.

This comes after the recent announcement of GlaxoSmithKline Consumer Nigeria to exit the country after 51 years of operations.

“GlaxoSmithKline’s exit from Nigeria has dealt a major blow to the country’s manufacturing sector, which is already experiencing significant collapse amongst its local businesses,” Dele Oye, national president of NACCIMA, said in a statement on Wednesday.

He said while the current administration has commendably set Nigeria on a long-term path to economic progression, it has been noted that some of the immediate positive economic policies of President Bola Tinubu have had an adverse effect on certain sectors of the country.

“In particular, the sudden rise in the price of petrol and abolition of the official naira rate has caused a significant backlash, eroding the already earned income and trading capital of several multinational companies that had established their previous earnings based on the official naira rate at the time,” he added.

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Over the past seven years, several manufacturers, especially in the fast-moving consumer goods industry, have either left the country or stopped production of some of their products as a result of the difficult operating environment.

Problems such as rising interest rates, surging inflationary pressure, and foreign exchange volatility are impacting input costs, operating expenses and the general profitability of businesses in Africa’s biggest economy.

Some of the companies that have exited the country are Surest Foam Limited, Mufex, Framan Industries, MZM Continental, Nipol Industries, Moak Industries, Stone Industries and Procter & Gamble.

In March, Unilever, which started operations in the 1920s, announced that it was stopping the production of its legendary OMO, Sunlight and Lux home and skin care brands in a bid to cut costs so as to concentrate on higher growth opportunities.

“With justification, the chamber is concerned that if the trend persists, the nation’s economic growth potential will not be realized. GlaxoSmithKline’s decision critically reflects on the nation’s poor ranking on the ease of business measures, which the chamber has constantly spoken about,” Chinyere Almona, director-general of LCCI, said.

According to Almona, it is time the government took appropriate actions to reverse the saddening trends in the business climate in Africa’s largest market.

“The chamber is inclined to suggest the government take a holistic view/ review of the business environment and take steps to make the nation’s business climate more competitive for growth,” she added.

NACCIMA recommends the government to focus on creating a conducive environment for businesses to thrive and provide access to single-digit short and long-term financing to reduce the cost of doing business.

“The government should prioritise investments in infrastructure and power supply, provide tax incentives to encourage businesses to invest in Nigeria, and improve the ease of doing business by reducing bureaucratic bottlenecks.

“Furthermore, we urge the government to work collaboratively with the private sector to develop policies that will stimulate economic growth and create job opportunities in the country,” it said.