Why Many Multinationals Companies Are Leaving Nigeria: Tinubu’s Minister Gives Details.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has provided insights into the reasons behind the departure of several multinational companies from Nigeria. Speaking on Channels Television’s “Sunday Politics” program, Edun highlighted the government’s efforts to improve the economic and investment climate to attract and retain more multinational corporations.
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Challenges and Solutions
Edun identified the lack of a liquid foreign exchange market as a significant impediment for the exiting multinationals. He stated, “One of the major drawbacks, one of the major impediments for them (exiting multinationals), was they did not have a liquid foreign exchange market.”
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To address this, the government has implemented a willing buyer, willing seller foreign exchange market, which, although not perfect, is a step towards stabilizing the exchange rate and lowering inflation and interest rates.
Improved Investment Climate
Recent executive orders signed by President Bola Tinubu have created a more favorable investment climate, particularly in the gas sector, which Nigeria has in abundance. Edun emphasized the government’s commitment to not only retain existing multinational companies but also attract new ones. He assured that with the improved environment, more companies would be willing to invest in Nigeria.
Economic Stabilization Package
Edun revealed that a proposal aimed at easing operations for both local and foreign manufacturers is part of an Economic Stabilisation Package currently before the President. He acknowledged the country’s economic challenges but expressed optimism, stating, “We are in a difficult place but the direction of travel is towards improvement. So, every single day, every single month, we are looking at an improved economic situation for Nigeria.”
Recent Departures and Economic Crisis
Nigeria’s current economic crisis, exacerbated by the government’s policies of petrol subsidy removal and unification of forex windows, has prompted some manufacturing companies to exit the country. Notable among these are the manufacturers of Huggies and Kotex diapers, Kimberly-Clark, as well as other multinational giants like Procter and Gamble (P&G), GlaxoSmithKline (GSK), Unilever, and Sanofi-Aventi Nigeria. These companies have cited high energy costs and currency depreciation as primary reasons for their departure.
Despite these challenges, Edun remains confident that the ongoing efforts to stabilize and improve Nigeria’s economic environment will ultimately succeed in attracting and retaining multinational investments.
