- Nigeria may lose 20,000 jobs as Procter & Gamble, GSK and other multinationals exit the country
- NECA has warned that this would lead to increased insecurity challenges and a rise in issues such as child labour
- The organisation urged FG to tackle the multifaceted challenges currently confronting businesses promptly
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
The Nigeria Employers' Consultative Association (NECA) has expressed concern about the repercussions of the current divestment of multinational companies in Nigeria.
According to NECA, over 20,000 employees have been directly affected by job losses due to these recent divestments.
It would be recalled that some major foreign companies recently shut down operations in Nigeria because of a challenging business environment.
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In August, GlaxoSmithKline (GSK), a prominent British pharmaceutical company, announced its decision to conclude its activities in Nigeria and subsequently withdraw from the NGX.
Procter & Gamble, a consumer goods manufacturer, followed suit, revealing plans to dissolve its on-ground operations in Nigeria and turn it into an import market.
Increased job losses, rise in insecurity
As the primary representative of employers and the business community in Nigeria, NECA issued a statement titled, "Urgent action to arrest the growing unemployment rate."
In the statement signed by its director-general, Adewale-Smatt Oyerinde, the organisation warned that the exiting of these companies could lead to job losses, which would lead to increased insecurity challenges and a rise in issues such as child labour.
“It is worrisome to note that in the last three years, over 15 organisations with a combined value-chain staff strength of over 20,000 employees have either divested or partially closed operations.
“This has dire consequences not only for organized businesses but also for labour, government revenue and the households.”
FG must tackle the challenges of businesses
In offering remedies for this issue, Oyerinde emphasised the need for the government to promptly tackle the multifaceted challenges currently confronting organised businesses.
According to Vanguard, Oyerinde observed that the challenging business conditions have rendered local enterprises non-competitive.
He recommended that the government promptly tackle regulatory and legislative obstacles that hinder businesses instead of fostering growth.
Additionally, he stressed the importance of consistently promoting domestically produced goods by enhancing critical infrastructure, urgently stabilising the foreign exchange market, and evaluating ministries, departments, and agencies based on revenue generation and the businesses they facilitate or promote.
Local companies also shutting down
Also speaking on the matter, Nathaniel Ukpa, a Lagos-based economist, told Legit.ng that if the economic challenges are not solved, not only will foreign companies leave, but local companies will also shut down.
Not only are international enterprises withdrawing from Nigeria, but domestic businesses also face closure.
The challenges stem from factors such as soaring inflation, a high exchange rate, security concerns, and a challenging business environment.
Business endeavours are undertaken with the anticipation of yielding profits; however, the looming threat of collapse arises when this expectation is unmet.
Consequently, it is imperative for the government to introspect on these issues and formulate strategies to address and resolve these pressing challenges.
Union Bank, Oando and five others delisting from NGX in 2023
In related news, Legit.ng reported that some major companies, foreign and local, have delisted from the Nigerian Exchange Limited (NGX).
This decision can have various implications, sparking discussions about the motivations behind such moves and their potential impact on the Nigerian capital market.
In an article, Legit.ng unveiled the top seven companies bid farewell to the stock exchange this year, leaving an indelible mark on the nation's financial narrative.