•Say some of Tinubu’s economic policies having adverse effect on certain sectors
Few days after GlaxoSmithKline announced its exit from Nigeria, Nigeria Employers’ Consultative Association (NECA) and Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) have expressed concern over the rising trend of closure of businesses, especially in the industrial sector of the Nigerian economy.
NECA and NACCIMA, in separate press statements yesterday, blamed the closures on the declining ease of doing business in Nigeria and some recent economic policies of the President Bola Tinubu administration.
Expressing deep concern over the increasing exodus of multinational companies from Nigeria, National President of NACCIMA, Mr. Dele Kelvin Oye, stated that the recent announcement of GlaxoSmithKline’s exit from Nigeria dealt a major blow to the country’s manufacturing sector, which he said was already experiencing significant collapse among its local businesses.
Oye said while the Tinubu administration had 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 Ahmed 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.
“As a result, there has been a steady exodus of multinational companies and the collapse of several local companies, resulting in significant job losses and economic damage.”
NACCIMA urged the government to urgently review the short-term effect of its economic policies as it related to commitments already concluded for remittances/raw materials by the affected companies/businesses to reverse the trend of companies leaving Nigeria.
He said, “We call on 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, NACCIMA urges the government to work collaboratively with the private sector to develop policies that will stimulate economic growth and create job opportunities in the country.
“We firmly believe that with the right policies in place, Nigeria’s economy can be revitalised and the country can become a hub for business and investment in Africa.
“In conclusion, it is crucial for the government to take urgent action to reverse the trend of companies leaving Nigeria and restore confidence in all sectors of the economy.”
Similarly, Director General of NECA, Mr. Adewale-Smatt Oyerinde, in a press statement titled, “Rising Rate of Business Divestment, Capital Flight and Business Closure in Nigeria – NECA Raises Alarm,” noted that the recent trend of business relocations and divestments was unfortunate.
Oyerinde stated that over the last decade, the private sector had been adversely affected by various policy thrusts of government.
“Many of these policies were either anti-growth, ill-timed or not-well thought out, while others were not in alignment with the country’s economic realities,” he said.
Oyerinde explained, “In more complex cases, we witnessed an era of policy clashes and contradictions, regulatory and legislative strangulation of businesses, which left many companies without a clear path for planning and decision making. Operational costs have increased astronomically, heaping more woes on many companies.” The NECA director general stated that the consequences of the years of wrong policy choices were not far-fetched.
He said, “As expected, divestment, capital flight and outright closures have become the ‘new normal’ within the business community. This is one of the chief reasons why the rate of unemployment continues to soar perpetually with consequential rise in crime and other security issues.”
Oyerinde explained that a large number of Nigerians become unemployed when businesses cease operations either by divestment or a move to other more profitable and hospitable environments.
“Inadvertently, the country loses income from taxes, social investment is hindered and poverty holds sway,” he said.
Oyerinde stated, “It is germane that government must take urgent steps to arrest this predicament. While we acknowledge and commend the current administration’s effort to address the concerns of the private sector and the steps it took to provide some respite to businesses in specific sectors of the economy, more needs to be done.
“Beyond the tax reforms activity and the provision of palliatives to select corporate entities, government should by deepening engagement with the organised private sector provide the right intervention and incentive not only to attract more Foreign Direct Investment (FDI), but to also prevent more companies from shutting down, divesting or leaving the country.
“Government must work collaboratively with the private sector with the view to developing and implementing action plans that are capable of promoting enterprise sustainability and competitiveness.”