LCCI, NECA fume over exit of P&G, other multinationals

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The Lagos Chamber of Commerce and Industry (LCCI) and the Nigeria Employers’ Consultative Association (NECA), have expressed disgust over the planned exit of Procter & Gamble, P&G, not long after Nampak, GlaxoSmithKline and others exited Nigeria, blaming stringent regulatory and legislative environment, poor infrastructure and policy inconsistencies for the difficulties faced by businesses.

NECA, however, commended the Federal Government for supporting the Small and Medium Enterprises, SMEs, and manufacturers through the disbursement of the N125 billion Presidential Palliative Programme.

This is even as the Lagos Chamber of Commerce and Industry (LCCI) has charged the Federal Government to create a more flexible and transparent foreign exchange (forex) policy to address scarcity issues.

Recall that the Chief Financial Officer of P&G, Andre Schulten, recently indicated that the company plans to transition its Nigerian operations to an import-only model, effectively dissolving its on-ground presence in the country.

This is following similar moves by the likes of Unilever Nigeria, Nampak and GlaxoSmithKline.

The company cited challenges in conducting business as a dollar-denominated organization and attributed its strategic decision to the macroeconomic conditions in Nigeria. Speaking, NECA’s Director-General,  Adewale-Smatt Oyerinde, said: “While we commend the Federal Government for the disbursement of the N125 billion intervention funds, we urge a quick and definitive action to arrest the continuous exit and divestment of legitimate organizations in Nigeria.

“In the last few years, hitherto strong brands like GSK, Nampak and now P&G and some other local brands have either closed shop or divested fully or partially. “These regrettable departures will persistently undermine the Federal Government’s efforts to attract foreign direct investment, rendering its initiatives highly ineffective.”

Highlighting the probable factors behind these business closures, he said: “The challenging business landscape, marked by stringent regulatory and legislative activities, insufficient infrastructure, and policy inconsistencies, all conspired to exacerbate the difficulties faced by businesses.

“When established global brands like P&G cannot survive the environmental and regulatory onslaught, it is worrisome how many more businesses will capitulate.

“Regulatory bodies tasked with fostering business growth persist in prioritizing revenue generation at the expense of their core mandate, while legislators, in the guise of oversight functions, consistently create impediments for organized businesses, hindering their operations. The contradictions and self-disruptive tendencies of many federal and state institutions can only be imagined, as they negate the efforts of the president to attract foreign direct investment.”

Speaking in the same vein, Dr. Chinyere Almona, Director General, LCCI, stated: “Over the last few months, there has been a consistent increase in exit plans or a reduction in involvement in the Nigerian market by the multinationals, and this trend is worrisome. We have seen the likes of Unilever Nigeria, GlaxoSmithKline, and Guinness Nigeria Plc.

“In Nigeria, lingering foreign exchange scarcity, poor power supply, port congestion, multiple taxation, insecurity, and poor infrastructure, among others, have taken a toll on many businesses in the country.

“The chamber recommends that the government should implement measures to stabilize and ensure the availability of foreign exchange for businesses, particularly those operating in dollar-denominated environments. The LCCI also implores the government to create a more flexible and transparent foreign exchange policy to address scarcity issues.

“The Central Bank of Nigeria (CBN) should prioritize the stability of the country’s currency and adopt the right policy mix to ensure price stability,” the LCCI DG added.

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