At least 10 multinational companies have exited Nigeria in recent years, the Manufacturing Association of Nigeria (MAN) has disclosed.
MAN also revealed that more multinationals will leave the country as the cost of operating in Nigeria has increased geometrically.
Chronicle NG reports that GlaxoSmithKline (GSK), Procter & Gamble, Surest Foam Limited, Mufex, Framan Industries, Moak Industries, Deli Foods, Stone Industries, MZM Continental, and Nipol Industries are 10 companies that have shut operations.
Despite presenting international businesses with the largest market on the continent, Nigeria still suffered from worrying economic slowdown decisions, which were often provoked by the rising cost of doing business, epileptic power supply, and weak infrastructural backing, among others.
Factor cost, as an integral element of the profit equation, is viewed with the utmost seriousness by multinational companies. In the face of rising costs, business people will likely search for cost-friendly locations.
President of the MAN, Francis Meshioye, said, “Now, if you spend N144 billion on alternative energy sources in one year, you can only imagine the impact that will have on your cost of operations. The manufacturing business in Nigeria is affected by so many factors; energy is a major one.
“Manufacturers provide almost every infrastructure themselves. Outside the major roads, you find out that manufacturers provide water, power, security, etc. So, when you look at it, you find out that the cost of doing business is so huge that a businessman will ask, ‘Is this the only place I can do my business? Can’t I move my capital elsewhere? Meshioye said.”
The exit of British multinational pharmaceutical and biotechnology company GSK to discontinue operations in Nigeria after 51 years has raised fear among experts that it may spark another exodus of multinational companies in the country.
The Nigerian Association of Chambers of Commerce, Industries, Mines, and Agriculture (NACCIMA), the Lagos Chamber of Commerce and Industry (LCCI), the Nigeria Employers Consultative Association (NECA), and other expert bodies say the exit of multinational companies is a result of unfavourable government policies.
They noted that GSK’s exit dealt a major blow to the country’s manufacturing sector, which was already experiencing a significant collapse.
However, since the coming of the Tinubu administration, both the president and some of his aides have been speaking about efforts being put in place towards revamping the economy, encouraging foreign direct investment (FDI), and also making local industries vibrant and competitive.
It is expected that the government take a holistic review of the business environment and take steps to make the nation’s business climate more competitive for growth.