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With the rising rate of business divestment, capital flight and business closure in Nigeria, the Nigeria Employers’ Consultative Association (NECA) has called on the Federal Government to urgently arrest the situation.
Describing the recent trend of business relocation and divestment as unfortunate, the employers’ body, in a statement, said over the last decade, the private sector has been adversely affected by various poor policies.
Director-General of NECA, Adewale-Smatt Oyerinde, in the statement, lamented that many of the policies were anti-growth, ill-timed or not well thought out, while others were not in alignment with the country’s economic realities.
He said: “In more complex cases, we witnessed an era of policy clashes and contradictions, regulatory and legislative strangulation of businesses, which left many companies without a clear path for planning and decision making. Operational costs have increased astronomically, heaping more woes on many companies.”
Noting that the consequences of the years of wrong policy choices are not far-fetched, the NECA chief said: “As expected, divestment, capital flight and outright closures have become the ‘new normal’ within the business community. This is one of the chief reasons why the rate of unemployment continues to soar perpetually with a consequential rise in crime and other security issues. When businesses cease operations, divest or move to other profitable and hospitable environments, a large number of Nigerians become unemployed. Inadvertently, the country loses income from taxes, social investment is hindered and poverty holds sway.”
While acknowledging the current administration’s effort to address the concerns of the private sector and the steps it took to provide some respite to businesses in specific sectors of the economy, the employers’ body said more needed to be done.
Oyerinde said beyond the tax reforms activity and the provision of palliatives to select corporate entities, government should deepen engagement with the Organised Private Sector (OPS), provide the right intervention and incentive not only to attract more foreign direct investment (FDI) but to also prevent more companies from shutting down, divesting or leaving the country.
He urged that the government must work collaboratively with the private sector with the view to developing and implementing action plans that are capable of promoting enterprise sustainability and competitiveness.
He mentioned that sectors such as cosmetics, services, pharmaceuticals, aviation, textile, maritime, construction and the real sector should be prioritised as they can generate jobs.
According to him, expeditious actions need to be taken to finalise the appointment of ministers and the constitution of boards of agencies to drive the economic programmes of the Bola Tinubu-led administration.
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