Industry stakeholders have urgently called for decisive action to halt the departure of multinational corporations from Nigeria, underscoring the necessity for a robust industrial policy that drives sector-specific growth, encourages private sector investment, and promotes collaboration across industries.
In discussions with LEADERSHIP Sunday, manufacturers emphasized the critical need to attract consistent Foreign Direct Investment (FDI) that supports long-term industrial and resource-based expansion, rather than transient capital inflows.
Mr. Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), alongside Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria (ASBON), highlighted the urgent requirement for a strategic industrial framework to stimulate manufacturing growth.
Leaders within the sector also called on the government to stabilise the macroeconomic environment, enhance the business climate, and roll out targeted support initiatives to bolster local manufacturers.
Experts further pointed out that persistent foreign exchange shortages and volatile currency rates remain significant obstacles for multinational companies, with difficulties in dividend repatriation and foreign currency access severely undermining investor confidence and prompting their withdrawal.
Investigations by LEADERSHIP Sunday reveal a marked transformation in Nigeria’s economic environment since 2020, with numerous firms either shutting operations, relocating abroad, or downsizing their presence within the country.
This shift, largely attributed to economic instability, erratic exchange rates, and rising operational expenses, has led to widespread job losses and heightened economic uncertainty.
Among the prominent corporations that have exited the Nigerian market are Standard Biscuits Nigeria Limited, NASCO Fiber Product Limited, Union Trading Company Nigeria Plc, and Deli Foods Nigeria Limited.
The primary reasons cited for their departure include challenging economic conditions, unpredictable currency fluctuations, and escalating costs of doing business.
Addressing these developments, Mr. Segun Ajayi-Kadir reiterated the pressing need for a comprehensive industrial policy that not only fosters industrial growth but also incentivizes private sector engagement and facilitates cross-sector partnerships.
“Nigeria currently lacks a cohesive industrial policy. It is imperative to establish a framework that enables the manufacturing sector to interact effectively with other industries and guides foreign economic relations,” he stated.
“The country should prioritize attracting stable Foreign Direct Investment rather than speculative capital inflows. We need investors committed to long-term industrial and mining ventures who will add value to our raw materials and natural resources, ensuring inclusive economic growth,” Ajayi-Kadir added.
Dr. Femi Egbesola of ASBON expressed concern over the adverse effects of multinational companies’ exit on Small and Medium Enterprises (SMEs) and indigenous businesses, urging the government to implement urgent measures to stem this trend.
He explained that SMEs play a vital role by providing backward and forward linkages, including outsourcing and subcontracting services to large multinational corporations.
Egbesola emphasized that the symbiotic relationship between SMEs and multinational companies fosters a shared marketplace, facilitating practical integration and mutual growth.
“When multinational corporations withdraw, SMEs suffer significantly, resulting in widespread job losses,” he noted.
“These corporations typically employ between 6,000 and 10,000 workers and bring advanced technology and machinery. Their departure means a loss of technological transfer and a decline in government tax revenues, which sends a negative signal to foreign investors and international stakeholders about Nigeria’s business environment,” he added.
To counter these challenges, Egbesola recommended that the government stabilise the economy, improve the ease of doing business, and introduce intervention programs aimed at supporting local manufacturers and indigenous enterprises to prevent further exits.
He also called for a comprehensive overhaul of economic policies to identify and reform problematic areas, thereby creating a more stable and attractive environment for foreign investment.
Johnson Chukwu, Managing Director of Cowry Asset Management Company, highlighted that the ongoing foreign exchange crisis and currency instability have dampened foreign investors’ enthusiasm for expanding multinational operations in Nigeria.
He pointed out that difficulties in repatriating dividends and securing foreign currency to meet import obligations have been key factors driving multinational companies away.
Chukwu explained that dollar-denominated investments are struggling to generate value in the current market, making it challenging for investors to repatriate profits and access necessary foreign exchange. He attributed this decline to the combined effects of foreign exchange liquidity shortages and the volatility of Nigeria’s forex market.
