The news of the imminent exit of GlaxoSmithKline (GSK) from Nigeria sent shockwaves across the country a few days ago.
GSK has been operating in Nigeria for at least 51 years and has been one of the major pharmaceutical companies in the country, manufacturing some of the best-known prescription medicine, vaccines, and consumer healthcare products, including brands like Panadol, Macleans, Andrew Liver Salt, and Amoxil.
Nigerians found the news disturbing for an obvious reason. Over the last decade, there has been a steady exodus of multinationals out of Nigeria, just as there has been a steady collapse of an increasing number of local companies.
The likes of ShopRite, Procter & Gamble, Surest Foam Limited, Mufex, Framan Industries, MZM Continental, Nipol Industries, Moak Industries, Deli Foods, and Stone Industries, among others, have shut down fully or partially in the past five years.
Therefore, the news of GSK’s impending exit, considered by many Nigerians as one too many, has heightened public anxiety over the viability of the country’s manufacturing sector.
The anxiety is further exacerbated by the ominous message coming from stakeholders in the country’s manufacturing sector.
The Poultry Association of Nigeria (PAN), in a statement jointly signed by its National President, Sunday Ezeobiora, and the Director-General, Onallo Akpa, raised the alarm that the soaring price of maize is causing a shutdown of poultry farms.
Similarly, Senator Walid Jibrin, a former chairman of the Textile Manufacturers Association of Nigeria, lamented that 155 Nigerian textile companies collapsed in a few years.
Also, the President of the Manufacturers Association of Nigeria (MAN), Francis Meshioye, said more multinationals would exit Nigeria if an electricity hike was implemented.
Last week, while receiving Ajay Banga, the President of the World Bank, President Bola Tinubu gave an assurance that he is taking the proper steps to solve Nigeria’s problems with his recent policies.
The country’s economic woes have become worrisome to Nigerians across all sectors, with many questioning why the situation has been so difficult for the government to tame.
Speaking in an interview on Monday, an accounting and financial development don at Lead City University, Ibadan, Prof Godwin Oyedokun, blamed the government for the rise in the number of companies shutting down in Nigeria.
According to him, if President Bola Ahmed Tinubu had put structures, including ministers, in place during its first 30 days, the current economic anxiety would have been addressed.
He said: “It is not only international companies exiting Nigeria, local firms, too, have collapsed. The truth is that times are hard for everyone. It isn’t easy to live and breathe in Nigeria today. I don’t want to be part of those criticising the current regime, but the blame is on them because they knew the problems of this country from day one.
“I expected Tinubu’s administration to stabilise governance, but that is not the case. Assuming the political offices have been filled, the anxiety in the economy will have been reduced. People do business to expect profit in returns, but collapse is imminent if that is not the case.”
Prof Oyedokun recommended that a general palliative by way of reduced tax should be given to the working population and firms.
“I would love a situation where the government reduces personal income tax. The government cannot guarantee the salaries of private companies, but it can lower personal and company income taxes. So that companies and individuals can breathe, that would have a general palliative that would cut across the working populace,” he said.
The Director of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, who also spoke on the tough situation in which manufacturing companies found themselves, pointed an accusing finger at the Central Bank of Nigeria (CBN).
He said: “The revaluation of foreign exchange liabilities amid the reforms in the forex market would predictably result in the current outcomes for companies with significant foreign exchange obligations.
“It is a question of the crystallisation of exchange rate risk. It is quite predictable. Using an exchange rate of N460 to the dollar to value these forex exposures over the past few years was purely academic. The reality is what is unfolding now.”