Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, has identified the lack of a liquid foreign exchange market as a significant challenge for multinationals exiting Nigeria.
He highlighted the government’s efforts to enhance the economic and investment climate to attract and retain international businesses.
Edun explained, “One of the major drawbacks, one of the major impediments for them (exiting multinationals) was they did not have a liquid foreign exchange market.”
To address this, the Nigerian government has introduced a willing buyer, willing seller foreign exchange market.
Edun noted that while this market is not yet at the desired level, improvements are ongoing.
“It is elevated, maybe not at the levels we would like it to be, but it is when you get inflation down that you can stabilize the exchange rate and even get it coming down similarly with the interest rate.
That fight is on. It is an improved environment for them, for big investors as a whole.”
Recent executive orders signed by President Bola Tinubu have also aimed to improve the investment climate, particularly for the gas sector, which Nigeria possesses in abundance.
“Companies will always come and go. Of course, our aim is to not only keep them but to have even more coming to invest, and we are sure that with the environment that we put in place, they would come,” Edun stated.
Tax reform proposals are part of an Economic Stabilisation Package designed to ease the operating conditions for both local and foreign manufacturers.
Edun emphasized the government’s commitment to improving the economic situation, saying, “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.”
Nigeria is currently grappling with an economic crisis triggered by the government’s twin policies of petrol subsidy removal and the unification of forex windows.
These policies have led to the departure of several manufacturing companies in recent months.
The latest to exit is Kimberly-Clark, the manufacturer of Huggies and Kotex brands of diapers. Other notable departures in the past year include US-based Procter and Gamble (P&G), GlaxoSmithKline (GSK), Unilever, and Sanofi-Aventi Nigeria.
These companies have cited various reasons for their exit, with high energy costs and currency depreciation being prominent among them.
The government’s efforts to create a more stable and attractive economic environment are critical to reversing this trend and ensuring that Nigeria remains a viable destination for multinational investments.
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