Following a recent report of another multinational firm, Aarti, an Indian steel firms’ planned exit from Nigerian, the Manufacturers Association of Nigeria (MAN) has reassured that the exit of multinationals will provide an opportunity for local companies to take their place.
MAN Director-General, Mr. Segun Ajayi-Kadir, in an interview with New Telegraph, in Lagos, admitted that it had been a tough period for Nigerian companies.
He, however said the realities on ground were not bad as being alleged or speculated in some quarters to warrant the exodus of multinational firms from Nigeria since local firms are alsl facing similar issues and keeping faith in the economy.
Findings had shown that the country’s economy lost about N95 trillion to multinational firms’ exit in the last five years. Ajayi-Kadir explained that the exit would not be felt in the long-term, as their exit is a blessing in disguise for local investors that have been looking for such opportunities.
The MAN DG stated that there wss no gain-saying that the entrance of these foreign firms into the country’s manufacturing sector resulted to some local firms in the manufacturing sector folding up, as they couldn’t wrestle with their foreign counterparts in their areas of specialisation.
The renowned manufacturing expert posited that the exit was an opportunity for local firms that had folded up to restart their production and hit the market.
He said: “It is not as if MAN is supporting the ongoing exit of multinational firms in Nigeria, especially in the manufacturing sector looking at their contributions to the Nigerian GDP.
“But the fact remains that we have local firms in our manufacturing sector that are yearning to take up the opportunity that is about to open doors for them with the exit of the multinational firms, that is the truth.
“There are lots of opportunities endowed in our manufacturing sector, so when one firm leaves, another one will come and spring up. You know there were some local firms before in these key industries doing well and fine, until these multinational firms came and pushed them out of their busi – nesses.
“To me, I see this as an opportunity for our local firms to step in. So rest assure there can’t be vacuum in Nigerian manufacturing sector, in the short and long-term.”
Ajayi-Kadir further stated that government and its agencies needed to create a conducive environment for manufacturers to excel, saying that aside the economic conditions, the harsh regulations were also factors unsettling genuine businesses in Nigeria.
For instance, the MAN boss alluded to the fact that foreign firms in the country’s manufacturing sector enjoyed juicy incentives like zero interest rates from their parent companies to set up plants and factories in Nigeria.
So it is this war chest that they brought that resulted in local firms packing up, since there is higher interest rate in Nigeria and banks are even not ready to give loans by requesting stringent collateral that is beyond the local firms’ capacity.
Aarti Steel will make it the sixth company to exit Nigeria in the first half of 2024, after Microsoft Nigeria, Total Energies Nigeria, PZ Cussons Nigeria PLC, Kimberly-Clark Nigeria and Diageo PLC left the shores of Africa’s most populous nation.
The exit of Aarti will further dent the perception of the country as an investment destination. In his reaction to Aarti’s exit, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, had said:
“The continuous exit of multinationals from the economy is a serious cause for concern and this is because of the im – plication that it has. “It has a negative implication for employment and the country’s perception as an investment destination.”