Divestiture: Why More Manufacturers May Exit Nigeria’s Business Space After P&G – MAN

The New Diplomat
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By Louis Achi

The Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has rued the exit of multinational consumer goods manufacturer Procter & Gamble from Nigeria, predicting that more manufacturers may follow suit.

According to him, until the federal government takes clear redefined measures to address challenges facing manufacturers in the country, more exits will happen 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.”

The MAN director general, however, said that the exit of multinationals from the country should serve as a lesson to the government, adding that it provides an opportunity to promote local manufacturers more that foreign investors as that is 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 unless we take clear redefined measures, many more will happen,” he said.

P&G recently announced its decision to shut down production lines in Nigeria and commence the exportation of its products into the country a few months after another manufacturer GlaxoSmithKline toed the same line.

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