Following the several departures of many multinational companies leaving Nigeria, the House of Representatives has made a decision to establish a dedicated committee to investigate the situation. The committee, which has not yet been formed, will investigate the reasons for the companies’ departure and work on strategies to prevent further exits. Babajimi Benson of APC, Lagos, moved the motion in response to Kimberly-Clark’s departure, a major American consumer goods company. This marks the House’s second investigation into similar trends in the past four months.
The motion put forth by Mr. Benson in February drew attention to the departure of Kimberly-Clark from Nigeria just three years after making a $100 million investment. The trend of companies relocating due to unfavourable working conditions, expensive power, and raw materials costs was a cause of concern. The House has not yet taken any action on this matter. The company, located in Ikorodu, Lagos State and employing 10,000 individuals in both direct and indirect positions, was highlighted by the legislator representing Ikorodu Federal Constituency.
Kimberly-Clark’s departure will lead to the loss of jobs and resources.
He explained that the departure of Kimberly-Clark would result in a significant decrease in employment opportunities, impact the Economy of Nigeria, and hinder the accessibility of affordable and reliable sanitary products in the country. Additionally, he mentioned that Kimberly-Clark’s brands, such as Huggies and Kotex, have played a crucial role in enhancing menstrual and childcare health in Nigeria by offering secure sanitary pads and diapers for women and children. Those products contribute to the country’s health.
In the meeting, Mr Benson suggested that Kimberly-Clark management should reconsider their plan to shut down operations and leave Nigeria until further discussions can be had with government officials. He urged the House to task the Committee on Commerce with meeting promptly with the company and relevant government agencies to address concerns and find solutions to prevent their exit from the country. Once this is done, they believe a suitable resolution will be made to improve the situation.
Many companies were encouraged to stay in the country.
Ibrahim Isiaka, a member of the APC party from Ogun, expressed concern about multinational companies leaving various sectors of the economy, such as oil and gas. He emphasized the importance of focusing not only on Kimberly-Clark but also on all multinational companies planning to exit the country. Isiaka suggested that the House should consider pleading with these companies to encourage them to stay in the country. As a result, he proposed a change to the motion calling for the creation of a special committee to thoroughly look into why multinational companies are leaving the country.
Voting for the amended motion was put forth by Deputy Speaker Ben Kalu, leading to its adoption. There is also a report that Procter & Gamble, a prominent American consumer goods company, has now exited the market. P&G, the manufacturer of well-known brands such as Pampers, Gillette, Ariel, Always, and Oral-B, may be required to pay between one billion to 1.5 billion dollars after taxes in order to restructure its operations in Nigeria and Argentina. These are two markets in which the corporation has experienced difficulties in conducting business.
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Many foreign businesses, particularly Manufacturing and energy companies, are leaving in large numbers due to the foreign exchange crisis and Devaluation of the naira. This results in reduced profits for them when converted to dollars. Unilever and GlaxoSmithKline both made strategic decisions in March 2023 affecting their operations in Nigeria. Unilever decided to stop producing homecare and skin-cleansing products due to low profitability in the country, aiming to make their Nigerian business more successful. On the other hand, GlaxoSmithKline chose to shift from manufacturing in Nigeria to a third-party distribution model.