The scourge of unemployment, which has been rising in the past decade, is worsening, as the nation lost over 15 foreign businesses in the last three years to unfavourable environment, according to data from the Nigeria Employers’ Consultative Association, (NECA).
The information added that over 20,000 workers had either divested or partially closed operations.
This development, according to NECA, has had dire consequences not only for organised businesses, but also for labour, government revenue and households.
Recall that two weeks ago, a global brand, Procter & Gamble (P&G) announced its departure from Nigeria after GlaxoSmithKline had earlier announced its own departure. The company has 107,000 workforce globally, which now has been thrown into labour market.
Also, a leading consumer goods manufacturer, Procter & Gamble, revealed plans to dissolve its on-ground operations in Nigeria and turn the country into an import market. The consumer giant stated that it is challenging to do business in Nigeria, as a dollar-dependent company and that the macro-economic reality in Nigeria is responsible for its decision.
Similarly, another multi-national company, GSK, whose prime products are Sunlight, Dove Beauty bar, Lux soap, Pepsodent Toothpaste, vaseline, Lifebuoy, and Rexona products, are amongst many others to join the fray.
The company, in a statement, disclosed it’s plans to cease the commercialisation of its top medicines and vaccines in the country via GSK local operating companies and move to a third-party direct distribution model. The company added that it plans to end its distribution agreement in the coming months and appoint a third-party distributor in Nigeria to supply healthcare products.
Other global brands like French pharmaceutical titan, Sanofi-Aventis and Norwegian energy leader, Equinor had earlier in the year divested.
Earlier this year, one of the leading consumer goods companies, Unilever Nigeria Plc, announced plan to stop manufacturing some of its popular products, including Omo and Lux, in Nigeria, throws thousands of Nigerians into jobs market.
The manufacturer said it will exit two categories, Home Care and Skin Cleansing, which will affect the brands mentioned earlier.
According to investigations Unilever has 755 workers.
Again, a leading French pharmaceutical company, Sanofi-Aventi Nigeria, recently decided to close its direct operations in Nigeria. The company planned to adopt a third-party model to distribute its products in Nigeria starting in 2024.
Already Sanofi, which employed a handful of Nigerians, has, as of December 2023, a market capitalisation of $119.57 billion. This makes Sanofi the world’s 114th most valuable company by market cap, according to investigations.
Another company, Bolt Food, also declared that it would discontinue its meal delivery service nationwide as from December 7, 2023. The corporation announced its decision to enhance its efficiency and optimise its resources.
Equinor, a Norwegian energy corporation, declared that it had sold its Nigerian operations, including its stake in the Agbami oil field, to Chappal Energies, a Nigerian company. Equinor’s three-decade presence in Nigeria came to an end with this transaction.
Since its establishment in 2008, the Agbami field in Nigeria has produced more than one billion barrels of oil, and Equinor has played a significant role in the growth of the country’s oil and gas industry. The company is said to have sizable workforce, the exact number this medium could not ascertain.
Expressing NECA’s reservations, the Director-General, Adewale-Smatt Oyerinde, noted that the divestments would seriously affect the Federal Government’s efforts to attract Foreign Direct Investment (FDI).
This position was supported by Dr. Olufemi Omoyele of the Department of Entrepreneurship at Osun State University, who stated that “Tinubu is traveling around the globe looking for expatriates to come and invest in the country, while the big multi-nationals with long standing presence in the country are leaving! How will investments come when the whole world is watching the divestment of the multinationals and the reasons for their exit? This Government should do first thing first, which is creation of enabling environment to do business with all infrastructural and legal protection.
Equally, Director-General of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, lamented how toxic the country’s operating environment is, thus encouraging relocation.
He said the number of jobs lost in the manufacturing sector rose to the highest in three years in the first half of 2023. The MAN boss submitted that the country needed investments to create more jobs, explaining that what shapes a country is decisive by leaders to positively improve the lot of the citizenry.
