The Nigeria Employers’ Consultative Association (NECA) has expressed alarm over the consequences of recent divestments by multinationals in the country, citing the loss of over 20,000 direct jobs.
NECA, the umbrella body for employers and a voice of business in Nigeria warned that the continuous divestments and closures of businesses would lead to growing unemployment, insecurity challenges, increased child labor, reduced disposable income, and decreased economic output.
The mass departure of global and local businesses in the last few years, representing over 15 organizations, has raised significant concerns about unemployment’s impact on societal stability and the economy.
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“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,” the association said.
The Director-General of NECA, Adewale-Smatt Oyerinde, described the situation as worrisome.
“We are concerned at the growing rate of unemployment in the country, made worse by the continuous divestment of global businesses and closure of local ones,” he said in a statement.
To address this challenge, NECA said there is an urgent need for the government to tackle multifaceted challenges faced by businesses.
According to Oyerinde, there is a need for swift action to improve the business environment by addressing regulatory hurdles, enhancing critical infrastructure, stabilizing the foreign exchange market, and ensuring government agencies facilitate and promote businesses rather than impede them.
“The harsh business environment has made local businesses to be uncompetitive. The government must urgently address regulatory and legislative bottlenecks that tend to stifle businesses rather than promote them.
“Continuous efforts must be made to promote locally-made goods through the provision of critical infrastructures; urgent stabilization of the foreign exchange market and ensuring that Ministries, Departments and Agencies are appraised not only by how much income they generate but also by how many businesses they facilitated or promoted,” he said.
Recognizing the critical role of the private sector in job creation, NECA stressed the importance of fostering a competitive and sustainable environment for businesses to thrive. The association urged deliberate efforts to support local industries and emphasized the need for government agencies to prioritize not just revenue generation but also the facilitation of businesses.
The ongoing exits of multinational companies from ground operations in Nigeria, such as Procter & Gamble, Glaxosmithkline and Equinor, are expected to result in a significant loss of Foreign Direct Investments (FDI).
This loss so far is estimated at $335 million (approximately N310 billion), representing the combined asset value of these recent exits. The departures of these major players in the FMCG and upstream oil sectors raise concerns about the future of Nigeria’s wobbling economy due to the reduction in FDI inflows.