Reps lament decrease in investments fortune, exodus of multinational firms

The House of Representatives on Tuesday expressed grave concern over the National Bureau of Statistics (NBS) quarterly report which indicated a 33% decrease in investments to $1.03 billion in the second quarter of 2023 from $1.54 billion in the same period in 2022.

Worried by the current economic downturn development as enunciated during the debate on the motion seeking to investigate the closure and exodus of multinational companies in Nigeria sponsored by Hon. Patrick Umoh and two others, the House tasked the Federal Government and other relevant agencies and ministries to implement the clearly defined measures to address the challenges confronting the nation, particularly in the manufacturing sector and create a conducive environment for businesses to thrive.

In his lead debate, Hon. Umoh observed that “over the past seven years, several manufacturing Companies, particularly three in the fast-moving goods industry, have either left Nigeria or stopped production due to business challenges.

“The House also notes that companies such as Surest Foam Limited, Mufex, Framan Industries, MZM Continental, Nipol Industries, Moak Industries, Stone Industries, Procter and Gamble, Sanofi-Aventis, and Equinor have exited the country, with French pharmaceutical producer, Sanofi planning to exit Nigeria, while Bolt Food discontinues food delivery due to economic challenges, Jubilee Syringe Manufacturing also declares temporary redundancy due to unforeseen business issues.

“The House observes that in 2006, Michelin and Dunlop, tyre manufacturing companies, relocated from Nigeria to Ghana due to lack of electricity supply and insecurity, recently, Unilever and GlaxoSmithKline (GSK) have announced plans to cease production of iconic products in Nigeria after 51 years and have appointed third-party distributors to sell prescription medicines and vaccines in the country.

“The House also observes a report by Cardinal Stone, a financial solutions firm which states that the Fast Moving Consumer Goods subsector may exit the country this year if the operating environment does not improve.

“The House is aware of a quarterly report of the National Bureau of Statistics (NBS) that showed a 33% decrease in investments to 1.03 billion, Dollars in the second quarter of 2023 from 1.54 billion, Dollars in the same period in 2022, and the United Nations Conference on Trade and Development reported that Nigeria experienced a negative (-187 million) foreign direct investment inflow last year for the first time in 33 years.

“The House is concerned that the continuous departure of Multinational Companies is causing concern. It could significantly impact the country’s GDP, hinder economic growth potential, and job losses, increase poverty, decrease government revenue and investor confidence in the Nigerian market.

“The House is worried that Multinational Companies are exiting or closing operations in Nigeria due to economic uncertainties, challenging business environments, lack of electricity, constant naira devaluation, high taxes, insecurity, poor infrastructure, port congestion, and stringent government policies.

“The House recognises the Tenth House of Representatives’ Agenda, particularly Agenda four (4) on ‘Economic Growth and Development,’ which, among others, aims to promote sustainable economic growth and improve ease of doing business in Nigeria,” he noted.

To this end, the House urged the Federal Government and relevant MDAs to collaborate with the private sector to develop policies that will stimulate economic growth and create job opportunities in the country.

The lawmakers also underscored the need to prioritise investments in the infrastructure and power sectors; and provide tax incentives to encourage businesses and investors to invest in Nigeria.

While ruling on the motion, the Deputy Speaker, Hon. Benjamin Kalu mandated the joint Committees on Industry, Labour, Employment and Productivity to investigate the closure of local Companies and the departure of multinational companies from Nigeria and the factors militating against the ease of doing business in Nigeria to assist the House in meeting its agenda on economic growth and development and forestall the closure of companies in Nigeria and report back within four weeks for further legislative action.