What is driving big companies out of Nigeria?
Several big companies, such as Gsk, Sanofi, and P&G, have recently announced their exit from Nigeria. This raises the question: what is driving them away from the largest economy in Africa?
Some of the likely reasons are:
- The continuous depreciation of the naira against the dollar, which makes it harder for them to import raw materials and equipment, and to repatriate profits.
- - The erratic power supply and the high cost of diesel generators, which increase their operational expenses and reduce their efficiency.
- - The poor state of the roads, which hamper their product distribution and delivery, and expose them to security risks.
- - The security challenges, such as kidnapping, banditry, and terrorism, which threaten their staff and assets, and disrupt their business activities.
The exit of these companies will have negative impacts on the Nigerian economy and society. It will lead to job losses, reduced tax revenues, lower foreign exchange earnings, and weaker consumer confidence. It will also limit the access of Nigerians to quality products and services, unless they are imported at higher prices.
However, this may also create opportunities for local companies to fill the gap left by the foreign companies, and to compete more effectively in the market. This may be a positive outcome, but it will depend on the ability of the local companies to overcome the same challenges that drove the foreign companies away.
Therefore, the government of Nigeria should urgently address the root causes of these challenges, and create a more conducive environment for doing business in Nigeria. This will not only prevent more companies from leaving, but also attract new investments and foster economic growth and development.
