Abuja, Nigeria: Nigeria has found itself at a crossroads as a wave of multinational manufacturing companies, once deeply rooted in the country’s economic landscape, have chosen to either exit or shift gears towards importation.
The gravity of the situation is underscored by the departure of iconic brands like Unilever, GlaxoSmithKline, Sanofi, Procter and Gamble, and even the relatively new entrant Bolt.
The disturbing trend extends beyond consumer goods to the very backbone of Nigeria’s economy—the oil industry. Notably, 26 oil companies, including giants like Shell, ExxonMobil, and ENI, have divested and sold their stakes to domestic investors.
The catalysts for this mass exodus are multifaceted, ranging from heightened insecurity in the Niger Delta to the government’s inability to fulfil its financial commitments in joint venture agreements for oil exploration.
President Bola Tinubu’s current efforts to attract new investors and revitalize the economy through global outreach are unfortunately shadowed by the concurrent departure of established players.
The question looms: How can the nation court fresh investments when longstanding stakeholders bid farewell?
A trip down memory lane recalls former President Olusegun Obasanjo’s similar quest for investors, which resulted in the acquisition of national assets at a fraction of their worth.
It serves as a stark reminder that indiscriminate pursuit of foreign investments can lead to exploitative outcomes, with the nation’s economy being the ultimate casualty.
The crux of the matter lies in the unfavourable operating environment for manufacturing activities in Nigeria.
A myriad of challenges, including the high cost of foreign exchange, energy shortages, burdensome taxation, a dysfunctional criminal justice system, and escalating insecurity, are collectively driving both domestic and multinational manufacturers away.
The consequences of this departure are dire and far-reaching. Unemployment is poised to escalate, and crime rates are likely to surge, posing a severe threat to social stability.
The spectre of a return to the scarcity and unaffordability of “essential commodities” reminiscent of 1984 looms large. The cost of vital drugs has surged beyond the average citizen’s reach, signalling a public health crisis in the making.
For the Tinubu administration, the imperative is clear: Nigeria must be reestablished as a haven for manufacturing, and indigenous manufacturers must be empowered to fill the void left by departing giants.
While ostensibly aimed at promoting trade, the Central Bank of Nigeria’s recent decision to lift import restrictions could inadvertently pave the way for an influx of trading companies rather than genuine manufacturing outfits.
To reverse this tide, a comprehensive strategy is required. The government must address the root causes of the manufacturing exodus, including streamlining foreign exchange policies, ensuring a stable and affordable energy supply, and implementing business-friendly taxation reforms.
A robust and efficient criminal justice system is paramount to instil confidence in foreign and domestic investors.
The solution lies within the proactive collaboration of the public and private sectors. By fostering an environment conducive to sustainable manufacturing, Nigeria can retain its existing industries and attract new players willing to invest in the nation’s potential.
It is time for a concerted effort to reshape the narrative and position Nigeria as a beacon of opportunity for manufacturers, both local and global. The stakes are high, and the window of opportunity is narrowing—action must be swift and resolute.