The exodus of the multinational companies comes in the form of downsizing their operations, transferring ownership or selling their stakes.

The development is raising the alarm over an increasingly challenging economic landscape, with analysts warning of tougher conditions and heightened uncertainties in 2025 if nothing is done to bolster local production.

The fear of looming economic turmoil is accentuated by poor capacity of ailing domestic industries which are currently unable to fill the void.

Already prices of foods and other goods have reached frightening levels with no signs of an imminent fall.

The harvest season has not had any remarkable impact on commodity prices as many Nigerians prepare for a bleak yuletide due to weak purchasing power amid surging prices.

Local manufacturers say they are currently on ventilators, awaiting government?s intervention through cheaper funding and more soothing economic policies to survive, before strategising to stabilise the fallout of the departing giants.

They are also eyeing the new tax law for succour as it holds immense benefits for them.

In 2020, more than 10 companies exited the Nigerian market citing a strangulating business climate. Notable closures included:

Standard Biscuits Nigeria Ltd, NASCO Fiber Product Ltd, Union Trading Company Nigeria PLC, Deli Foods Nigeria Ltd

In 2021, the exodus worsened with over 20 firms shutting down operations in Nigeria. Among those who left were: Tower Aluminium Nigeria PLC, Framan Industries Ltd, Stone Industries Ltd, Mufex Nigeria Company Ltd, Surest Foam Ltd.

In 2022, the number soared to over 15 firms. Some of them are- Universal Rubber Company Ltd, Mother?s Pride Ventures Ltd, Errand Products Nigeria Ltd, Gorgeous Metal Makers Ltd

The trend continued in 2023 as over 10 companies pulled out of Nigeria. Some of them are; Unilever Nigeria PLC, Procter & Gamble Nigeria, GlaxoSmithKline Consumer Nigeria Ltd, ShopRite Nigeria, Sanofi-Aventis Nigeria Ltd, Equinox Nigeria, Bolt Food & Jumia Food Nigeria.

Between January and October this year, a lot of companies have also exited Nigeria. They include- Microsoft Nigeria, Total Energies Nigeria (impacted by divestment strategies), PZ Cussons Nigeria PLC, Kimberly-Clark Nigeria, Diageo PLC.

On December 1, Holcim, a Swiss building materials company, agreed to sell its Nigerian business to Huaxin Cement Ltd., a Chinese firm.

The deal, valued at $1 billion, would lead to the sale of Holcim?s 83 percent stake in Lafarge Africa, a member of the Holcim Group.

With the exodus and poor capacity of local players, experts are insisting that the Nigerian economic situation must be tackled frontally and not sauced in politics to give policymakers a false impression of economic progress when in actual sense the economy is going downhill.

The scorching economic climate has also permeated the subnational level. Latest government statistics revealed that only four states and the FCT attracted foreign investors in the first nine months of 2024.

The breakdown shows that Lagos pooled $4.80 billion foreign direct investments, followed by the FCT with $2.43 billion. Kaduna secured $1.95 million FDIs, Enugu, $184,229 and Ekiti $117,850.

Commenting, Daniel Dickson-Okezie, SMEs expert and former chairman, SME Group of the Lagos Chamber of Commerce and Industry (LCCI) noted that the exit of companies from Nigeria has a tendency to raise unemployment, which directly heightens insecurity. He added that the departure of global giants will also lead to a decrease in tax revenue hitherto paid by the exiting companies.

?Local manufacturers lack the capacity to fill the vacuum left by foreign companies that are leaving Nigeria. The reason is that the local manufacturers are also battling with the challenges that are chasing the foreign players away.

?According to Dr. Vincent Nwani, a researcher, Nigeria lost about 94 trillion naira as a result of multinationals that left Nigeria in the past five years. According to the Nigerian Bureau of Statistics, the unemployment-to-population ratio was 76.1% in the second quarter of 2024. This is alarming?, he said.

As a panacea, he urged the government to implement the right policies and provide a conducive ecosystem for the private sector to flourish.

?Again, fiscal and monetary authorities need to develop a medium-term growth plan, which is anchored on boosting local production, supporting ease of doing business, attracting private investment, developing infrastructure, implementing business-friendly regulatory policies, driving economic diversification, and generating employment. These are the keys to having a better 2025?, he added.

For David Etim, President, Calabar Chamber of Commerce and Industry, there is no need to dissipate the nation?s energy on the ?fleeing? behemoths.

?I don?t think we should worry about the exits, what we should be worried about are the policies. No investor goes to a country where the local businesses are suffering. They look at the businesses in the country to determine whether they should make an investment or not.

?So, what we should be focused on is getting our business environment right. The local industry, manufacturing, producers prosper once the indigenous economy prospers and foreign direct investment will come because they are following the money. They are not following talks, they are not following what they call powerpoint presentations. They are following the money,? he said.

On her part, the Chairman, National Association of Small Scale Industrialists (NASSI), Lagos Chapter, Gertrude Akhimien, said the departure of offshore firms is worsened by a double whammy of ballooning unemployment mass death of local factories.

?There are so many people that are unemployed, and many factories have shut down. And then, you know, everywhere is desolate. It?s so sad indeed.

?I had cause to visit a factory a couple of days ago and they were shutting down and selling off their properties and assets. It was really sad because I imagined the number of people that were gainfully employed, looking after their families. Now, they have nowhere to go to.

?When you talk about local manufacturers whether they have the capacity, unfortunately not. Most times the multinationals, they come with a lot of funding. So, they are able to build very big factories and companies.

?But sadly, the local manufacturers are still on the small scale because a lot of times our banks refuse to fund businesses because they see it as a risk.

?But these manufacturers, come funded. Most times they even bring in their money from abroad, you know, but sadly we don?t have that kind of relationship with our banks.

?I was at a function yesterday and they said that 75% of the bank lending is done to oil and gas businesses because they are sure their money is going to come back.

?So, they don?t fund any other business, as long as you are doing manufacturing in other areas, it?s at your risk. They say they see it as a risk and they are not ready to give you that money. And then, of course, you know the interest rates of banks. At 35%, what can you produce that can give you profit and you can pay back a loan at 35% interest rate?

?So, these are some of the issues that mitigate against the local manufacturers taking over.

And in terms of workforce, I understand about 30,000 workers have been lost in the manufacturing sector.

?Can we stem the tide? Yes, we can.

Just one government policy can make a lot of difference. How can investors come to invest when they are seeing the companies leaving en masse; what is the encouragement? That tells them that the environment is not conducive. I would recommend that government should engage these companies that are leaving and find out what can be done to stop the movement and mitigate the losses. And if it means supporting them either financially or with policies, maybe to reduce rent or give them some waivers, that would help to keep them. But to just ignore them as they leave and then you go back to other countries begging them to come, it really doesn?t make sense to me. So, it?s very important to hold on to what you have.

It?s like one who owns the business and then allows your best workers to leave. You make sure that you keep your best workers.

?If you know these companies are necessary for the development of this country, to help create employment, generate wealth then it?s important that we try to keep them.

Already there are a lot of items that are missing. The products are not only scarce, they are no longer available on the shelves of supermarkets and big stores because some of these in factories have shut down. We?re going to start importing them again. Which means that we?re going to still spend that few little foreign exchange that we have, that we?re trying to conserve.

?So, dialogue with these companies is important to find out their pains and help solve them and retain the relationship for better economy. Well for the 2025 economic outlook, I believe there is a silver lining.

I?ve always been optimistic. I know things are hard. For the MSMEs for example if the new tax law comes in, for the companies earning 50 percent and below will not be taxed that will go a long way to helping a lot of companies because tax kills companies. Naira depreciation is also affecting businesses. Though it has appreciated for now, if it can be sustained it will help the country.

In the area of fuel, with Dangote refineries on board, there will be available fuel and the cost will come down, which will go a long way to reduce prices of goods in the market?, she said. (Daily Sun)

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