The Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, expressed remorse over the departure of multinational consumer goods manufacturer Procter & Gamble from Nigeria, stating that additional manufacturers might choose a similar path.
He emphasized that unless the Federal Government implements clearly defined measures to tackle the challenges confronting manufacturers in the country, further departures are likely to occur in the manufacturing sector.
“Obviously, we received it (P&G exit) with sadness but it is not totally unexpected and more may happen because there is no doubt that we operate in an environment that is challenged,” Ajayi-Kadir said on Channels Television’s Sunrise Daily on Monday.”
“Manufacturing in any economy is a strategic choice, the government has to make up its mind whether it wants its country to be an industrialised one. Once that decision is taken, you have to do all that is needed to remove the binding constraints that limits the performance of that sector, Nigeria has not done so and that is why you can see there are closures.”
“I think it is news because it is Procter and Gamble, it is news because it is GlaxoSmithKline, it is news because they have been in the country for a very long time, but they are several others that have died quietly and for reasons that are clearly avoidable.”
Nevertheless, the Director General of MAN remarked that the departure of multinational companies from the country should serve as a lesson to the government. He added that it presents an opportunity to prioritize and promote local manufacturers over foreign investors, as this approach tends to be more enduring.
“I think there is a strong lesson to be learnt there which is the fact that the big ones that are exiting are those multinationals and I think this will send a clear signal to government that regrettable as it is, it should guide future actions, we need to be strategic in what we promote.”
“So, what this means is that if you have a challenged local manufacturer, he is not likely to go anywhere. That is why we are saying that foreign direct investment is excellent, it has led to phenomenal improvement in the performance of the manufacturing sector for so many economies but it should come secondary to empowering the local investor, the existing manufacturers because that is what is enduring.”
“So, it is regrettable, it is not totally unexpected, and I think except we take clear redefined measures, many more will happen,” he said.
P&G has recently declared its intention to close down production lines in Nigeria, opting instead to export its products into the country. This move comes just a few months after another manufacturer, GlaxoSmithKline, took a similar course of action.