Experts Raise Concerns Over Escalating Company Collapses In Nigeria

The recent announcement of GlaxoSmithKline (GSK) exiting Nigeria has sparked alarm nationwide.


GSK, a prominent pharmaceutical company operating in Nigeria for over five decades, known for producing popular prescription drugs, vaccines, and consumer healthcare items, including Panadol, Macleans, Andrew Liver Salt, and Amoxil, has sent shockwaves through the country.


This exit adds to a growing trend of multinational departures from Nigeria, accompanied by a distressing rise in the closure of local enterprises over the past decade.


Notable companies like ShopRite, Procter & Gamble, Surest Foam Limited, Mufex, Framan Industries, MZM Continental, Nipol Industries, Moak Industries, Deli Foods, and Stone Industries, among others, have either partially or entirely shut down within the last five years.


The impending departure of GSK has fueled public unease about the sustainability of Nigeria’s manufacturing sector.


Amid these concerns, key stakeholders have expressed apprehension. 


The Poultry Association of Nigeria (PAN) issued a joint statement signed by National President Sunday Ezeobiora and Director-General Onallo Akpa, warning that skyrocketing maize prices are forcing poultry farm closures.


Senator Walid Jibrin, a former chair of the Textile Manufacturers Association of Nigeria, bemoaned the collapse of 155 Nigerian textile firms in a short span.


Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN), cautioned that more multinational companies might exit if electricity tariffs were hiked.


In a recent meeting with World Bank President Ajay Banga, President Bola Tinubu pledged to address Nigeria’s challenges through new policies.


Nigerians across sectors are deeply concerned about the country’s economic predicament, questioning why the government has struggled to mitigate these issues.


In an interview, Prof Godwin Oyedokun, an accounting and financial development expert at Lead City University, Ibadan, criticized the government for the rising number of closures. 


He suggested that early government action, including appointing ministers, could have alleviated the economic uncertainty.


Prof Oyedokun proposed a general palliative in the form of reduced taxes for individuals and firms to relieve economic pressures.


Dr Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), implicated the Central Bank of Nigeria (CBN) in the challenges faced by manufacturing companies. 


He noted that the revaluation of foreign exchange liabilities amid forex market reforms was a key factor contributing to these issues.


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