In a concerning revelation, the Nigeria Employers’ Consultative Association (NECA), the apex body representing employers, has disclosed that a total of 15 multinational companies have either divested or partially closed their operations in Nigeria over the past three years.
The Director-General of NECA, Adewale Oyerinde, expressed his apprehensions during an exclusive interview with The PUNCH, highlighting the far-reaching implications of the substantial job losses across various sectors.
With a combined value-chain staff strength exceeding 20,000 employees, these organisations’ departures are predicted to have dire consequences for organised businesses, labour, government revenue, and households.
Oyerinde emphasised, “It is worrisome to note that in the last three years, over 15 organizations with a combined value-chain staff strength of over 20,000 employees have either divested or partially closed operations.”
NECA voiced its concerns about the escalating unemployment rates in the country, attributing them to both global business divestment and local closures.
Oyerinde cautioned that the aftermath of these massive job losses would perpetuate insecurity challenges, intensify child labour occurrences, adversely affect family disposable income, erode individual purchasing power, and drastically reduce the overall economic output.
He warned, “The consequences of these massive job losses across sectors will continue to create insecurity challenges, increase the occurrence of child labour (as children will be forced to become breadwinners), adversely affect the disposable income of families, erode the purchasing power of individuals, and drastically reduce the economy’s output.”
NECA’s examination of the exits of prominent companies such as GSK, Sanofi, Procter & Gamble, Nampak, and others, which had been pillars of the Nigerian business landscape for decades, raised concerns about the ripple effect on the broader business ecosystem.
Unilever Nigeria’s announcement of its exit from the home care and skin cleansing markets in Nigeria last November and Procter & Gamble’s departure last year further heightened worries.
Oyerinde stressed the impact on the value chain, stating, “Within the value chain, numerous enterprises serve as suppliers to these major corporations, and their sustainability is significantly compromised when the primary businesses they cater to face extinction.
The survival prospects of these secondary businesses are at stake, and their employees are also at risk, as the departure of the main clients could lead to their demise.
The crisis within the value chain deserves more attention than it currently receives.”
As the nation grapples with this economic turbulence, stakeholders are increasingly calling for comprehensive measures to address the root causes and mitigate the impending fallout on various sectors.
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