Against the backdrop of the recent departure of multinational consumer goods giant, Procter & Gamble (P&G), from Nigeria, the Manufacturers Association of Nigeria (MAN) has warned of likely exit of more companies from the country.
By Emma Ogbuehi
Against the backdrop of the recent departure of multinational consumer goods giant, Procter & Gamble (P&G), from Nigeria, the Manufacturers Association of Nigeria (MAN) has warned of likely exit of more companies from the country.
Director General of MAN, Segun Ajayi-Kadir, who expressed the fear, acknowledged that the exit was not entirely unexpected.
He attributed it to the numerous challenges manufacturers face in the country’s difficult operating environment.
Ajayi-Kadir who made the observation on Channels Television’s Sunrise Daily on Monday, said; “Manufacturing in any economy is a strategic choice, and the government must decide if it wants the country to be industrialised. If so, it must take all necessary steps to remove the binding constraints that hinder the sector’s performance. Nigeria has not done so, and that is why we see closures.”
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Ajayi-Kadir stressed that the exit of P&G is just the latest in a string of manufacturers leaving the country. He noted the need for the government to take immediate action to address issues.
“This is news because it’s Procter and Gamble, it’s news because it’s GlaxoSmithKline, it’s news because they have been in the country for a very long time,” he said. “But several others have quietly closed down, and the reasons are clearly avoidable.”
While expressing regret over the departure of these large companies, Ajayi-Kadir sees it as an opportunity to focus on promoting local manufacturers. He believes that empowering existing manufacturers will result in a more sustainable and enduring industrial sector.
Procter & Gamble, P&G, a major global player in the Fast Moving Consumer Goods, FMCG, segment and Equinor, another global player in the upstream oil sector, gave indications of leaving the country, last week, posting an expected loss of $335 million (about N310bn) in Foreign Direct Investments, FDI, to the economy.
The estimated N310bn amount represents the combined assets value of the two business giants. Their exit comes on the heels of relocation in the second half of this year by two other major multinational companies, GlaxoSmithKline, GSK, Consumer Nigeria Plc and Sanofi-Aventis Nigeria Limited, a French pharmaceutical company, which pulled out assets estimated at over $800 million from Nigeria, citing harsh operating environment.
P&G, an American multinational consumer goods, says it has plans to transition from local production to solely importing its products as the firm winds down its on-ground presence in Nigeria.
Equinor is exiting after selling its Nigerian business, including its share in the Agbami oil field to Nigerian-owned energy company Chappal Energies.
Explaining the decision, Andre Schulten, chief financial officer, P&G, said the decision is a result of “the challenging business environment in Nigeria, as well as the difficulty in creating US dollar value.”
On his part, Equinor’s Senior Vice President for Africa Operations, Nina Koch, in a statement, said: “Nigeria has been an important part of Equinor’s international portfolio over the past 30 years.
“This transaction realises value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas.”
