In an interview, Olatunbosun Oyintiloye, a prominent member of the All Progressives Congress in Osun State, discussed potential solutions for preventing the exodus of foreign companies from Nigeria, among other pressing topics. When asked to elaborate on why the departure of multinational corporations from Nigeria is causing concern for the government, he stated that it is a matter of great importance for everyone in the nation. The problem began many years ago and was allowed to grow by earlier governments.
Regrettably, these signals were ignored until they caused large Manufacturing businesses to close down and move elsewhere. The recent departure of prominent multinational corporations in the fast-moving consumer goods industry, such as GlaxoSmithKline Nigeria and Procter & Gamble, reinforces the trend set by the previous administration. The withdrawal of these companies from Nigeria is causing concern and urgency, demanding immediate action from the government. A comprehensive strategy must be implemented by the current administration to reverse this troubling trend and improve the situation.
These companies are leaving due to the ongoing power crisis.
Also, the unpredictable nature of foreign exchange rates, along with the limited availability of foreign currency, create a challenging business atmosphere. These circumstances hinder companies from effectively forecasting, controlling expenses, and sustaining financial viability in the long run. Furthermore, the lack of proper Infrastructure in Nigeria has resulted in higher operating expenses for businesses. The inconsistent Electricity supply forces companies to spend extra money on generating their own power, and the inadequate transportation system causes inefficiencies and setbacks. Additionally, the presence of various taxes, complex bureaucratic obstacles, and inconsistent policies have contributed to a business environment that is frequently viewed as inhospitable.
Simplifying regulatory procedures and promoting policy coherence can greatly enhance the overall business atmosphere. These companies are leaving due to the ongoing power crisis, unpredictable foreign exchange rates, and challenging business conditions. These issues have been persistent problems in the Nigerian Economy for a long time. Nigeria is urged to revamp its economic policies and infrastructure to draw in local and international investors, as seen by the departure of these multinational companies. Taking swift action on the power crisis, stabilizing the foreign exchange market, enhancing infrastructure, and establishing a more favourable regulatory environment for businesses are key steps that can be taken promptly.
Exit of multinational corporations will exacerbate economic difficulties.
More so, the departure of foreign companies from Nigeria undoubtedly poses a significant threat to the economy. The exit of multinational corporations will only serve to exacerbate the economic difficulties that Nigerians are currently grappling with. The shift in ownership, decrease in foreign investments, rise in inflation, foreign exchange instability, and decline in Government Revenue will likely result in a rise in Unemployment rates among Nigerian employees in these companies. To achieve economic growth, countries need foreign investments and supportive environments for local industries. He believes there are no benefits without these essential components in place.
Ensuring a favourable legal environment, effective policy development, addressing infrastructure gaps, implementing power sector reforms, reducing multiple taxes, and stabilizing the foreign exchange market can all help guarantee the contributions of these companies to Nigeria’s economy. Their exit poses a significant risk. Local industries are struggling in the same harsh business environment as foreign-owned businesses. They too are having a hard time staying afloat and turning a profit, despite their best efforts. In order for local industries to flourish, it is imperative that foreign companies remain in the country.
Related Article: Lawmakers to Probe Exit of Foreign Companies
Without the presence of foreign companies, the growth prospects for local industries are minimal. The collaboration between local and foreign companies is essential for driving Economic Growth and boosting the country’s GDP. Nigeria’s economic revival plan involves a combination of short and long-term strategies, including attracting foreign Investors and supporting local industries. Once these measures are implemented, businesses will have the necessary support to flourish in a conducive environment. Multinational companies have been leaving the country steadily since democracy was reinstated in 1999. The recent increase in departures has raised concerns, partly due to reforms by the current administration. Efforts are being made to lessen the effects of these departures.