The recent departure of several multinational companies from Nigeria could present a significant opportunity for the nation’s domestic manufacturers, according to Segun Ajayi-Kadir, Director General of the Manufacturers Association of Nigeria (MAN).
In a media chat, Ajayi-Kadir emphasized that with the right government support, local manufacturers can fill the void left by these multinationals and thrive.
Ajayi-Kadir stated, “I think there is a strong lesson to be learned here. The big ones leaving are the multinationals, which should send a clear signal to the government. We need to be strategic in what we promote. He is unlikely to go anywhere if you have a challenged local manufacturer. That is why we say foreign direct investment is excellent, but it should come secondary to empowering the local investor, the existing manufacturers, because that is what is enduring.”
He urged the government to implement policies that support the manufacturing sector, including providing access to affordable credit.
“The government should also open new windows for us to source our credit at rates that are not lower and that are not higher than five per cent. These are very quick wins that the government can do that can lower the pressure that is upon the manufacturing sector,” Ajayi-Kadir noted.
Ajayi-Kadir also called for decisive action to prevent further exits and ensure the growth of the manufacturing sector.
“Manufacturing in any economy is a strategic choice and the government must decide if it wants the country to be industrialized. If so, it must take all necessary steps to remove the binding constraints that hinder the sector’s performance. Nigeria has not done so, so we see closures,” he added.
While the exit of American and European multinationals may seem alarming, findings suggest that their departure is paving the way for companies from Asia. Magnus Onyibe, a public policy analyst, remarked that the influx of Asian companies could be beneficial for Nigeria.
Onyibe said, “And guess what foreign companies have been stepping in to fill the void left by American and European companies? Asian companies. These include both Chinese and Indian corporations. Even Singaporean and Lebanese firms have presence in the list.”
Examples of this shift include Turkish firm Hayat Kimya’s premium diaper brand, Molfix, filling the gap left by P&G’s withdrawal.
Additionally, Tolaram Group, a Singaporean firm, acquired Diageo’s stake in Guinness Nigeria, and Nigerian investors Renaissance Group purchased Shell’s onshore holdings after the oil giant decided to focus on offshore activities. EnjoyCorp Limited also bought Heineken’s majority stake in Champion Breweries.
As Nigeria navigates these changes, Ajayi-Kadir’s call for strategic support for domestic manufacturers remains crucial to transforming potential challenges into opportunities for sustainable growth.