PAINFUL exit of multinational companies from Nigeria has not only become a nightmare for the struggling economy, the Federal government which benefits mainly from the hitherto active presence of the array of international business organizations here seem to care less. Not only are the global corporations leaving in droves, hundreds of indigenous business outfits are also shutdowning, while the few surviving ones are producing at less than half of their installed capacity.
The exodus of the international corporations seemingly grew worse in the last five years. They include but not limited to manufacturers of food items, pharmaceuticals, home appliances, metal products, chemicals, media products, building materials and big-time sales and marketing outfits. It is estimated that about N94trillion worth of outputs had been lost from 2020 to the first half of 2024.
Similarly, local manufacturing companies that had failed in the last five years alone account for scores of trillion naira lost to the festering economic crisis. On the other hand, service delivery organizations had also collapsed with huge financial costs. Businesses under the micro, small and medium enterprises account for a huge chunk of the dead ventures. And, of course, some of the big businesses had not been spared by the severe economic upheavals.
Appropriate government agencies at national and sub national levels have details of multinational conglomerates and indigenous ones existing here. They also keep tab on the ones that had exited or dead. Periodically, they upload the figures to government or its appropriate organs for further action. But as it seems, not much appears to have been done with regard to the feedback.
The unprecedented exodus of foreign companies from the country, plus other violent disruptions in the economy, is attributable to the following variables: foreign exchange crisis, worsening security conditions, power supply shortages and outrageous energy costs. Also in the tragic equation are the country’s fiscal and monetary policies, usually processed and dished out by the Central Bank. Multiple taxes imposed on companies and high lending rates adversely affect the enterprises.
The implications of the exit of multinationals and the collapse of local business ventures are huge and varied. Government derives substantial revenues from the corporations to boost its gross domestic product. The absence of the aforementioned entities means that revenue, which ought to accrue to government from their activities is lost. Yet, the government preaches all the time for the diversification of revenue sources.
Furthermore, with a high lending rate of not less than 26 percent, a good number of businesses that are lucky to get loans fail to repay the facilities when they are due, leading eventually to enforcement of recovery processes and unfortunate weakening of the outfits and their ultimate collapse. The high interest rates partly explain why some potential ventures cannot start off.
The subject matter of this narrative, we believe, partly accounts for the humongous figures of job losses and unemployment in the labour space, the consequence of which is mass poverty in the society. The toxic economic environment has in addition facilitated increases in societal evils like robbery, prostitution, advanced fee fraud, internet crimes, ritual killings, etc. The evils are inexhaustible.
We are pained that the first year of President Bola Tinubu administration witnessed part of the exodus of foreign companies from the country, and the demise of a large number of local enterprises. Beyond grandstanding, it would appear the government had not taken the economic threat seriously. We cannot point at any practical step to indicate its seriousness.
The obvious conclusion from the subsisting trend of corporations exiting Nigeria and related issues is the apparent failure of successive governments to provide conducive economic environment for businesses to thrive. This is the challenge the Tinubu government must embrace and tackle. The mass exit of foreign companies from Nigeria should keep President Tinubu and his advisers awake at night, if that will make them work out implementable strategies to combat the ugly scenario.
