Operators have expressed fears of more foreign companies leaving the country, following the recent announcement of GlaxoSmithKline Consumer Nigeria Plc to shut down its operations in the Nigeria.
Findings by revealed that some other multinationals were substituting foreign for local resources, as they explored survival strategies to remain in business.
GSK, a company into research that developed and manufactured innovative pharmaceutical medicines, vaccines and consumer healthcare products, said its parent company, GSK Plc UK, revealed its intention to cease commercialisation of its prescription medicines and vaccines through its Nigerian subsidiary.
It would be recalled that in March, Unilever Nigeria, said it would be prioritising, “business continuity measures that reduce exposure to devaluation and currency liquidity,” after announcing a planned end to the production of its popular brands, including Omo, Sunlight and Lux.
The naira value had maintained a steady fall to the dollar, after the Central Bank of Nigeria announced the free flow of the exchange rates in the country in June.
Multinationals, had also, continued to decry their inability to repatriate their monies back to their countries.
The Association of Community Pharmacists of Nigeria, expressed displeasure at GSK’s exit.
In an interview with the National Chairman, ACPN, Adewale Oladigbolu, feared other multinational companies may exit Nigeria if care was not taken.
Oladigbolu said, “GSK’s departure is a minus for the pharmaceutical industry because most pharmacies in Nigeria have one thing or the other to do with GSK, so shutting its operations in Nigeria is not a good signal for the pharmaceutical industry in Nigeria.
“The company that is likely to take over their branch will not be as scientific as GSK because there are the commercial and the scientific aspects to the pharmaceuticals.”
The ACPN chair said the British multinational drugmaker and biotechnology company was exiting the country due to shortage of foreign exchange.
He added, “GSK is not exiting Nigeria because it is broke, but because it cannot transfer money to its parent company for the past two and half years. It could not get approval for forex officially, and to be transferred ethically. The same thing happened to the airlines, and the government helped them, but they could not help pharmaceutical companies.”
Commenting on the likely reasons driving a company’s exit from the Nigerian market, a professor of economics at the Onabanjo Olabisi University, Sheriffdeen Tella, blamed the bearish economic policies implemented by the government.
He said, “I don’t think the CBN’s forex policy is the sole reason why foreign companies are exiting the country. Three things could have affected them, which are the high interest rate; price of energy and the volatility of our exchange rate. All of these challenges culminated in the inability to meet domestic production and remain competitive.”
The Director-General, Nigeria Employers Consultative Association, Mr Wale Oyerinde, in an exclusive chat with , said, GSK was just one of the many businesses that were either concluding their shutting down plans, or had shut down already.
“It is no gainsaying that the operating environment for many businesses has not been favourable, made worse by the ongoing challenges,” he said.
The Lagos Chamber of Commerce and Industry expressed grave concern at the decision by GSK to shut down its operations in the country after over five decades.
The Director-General, LCCI, Dr. Chinyere Almona, said, “The decision is one of the many multinational firms have had to make in recent years with their adverse effects on the economy. Despite presenting international businesses with the largest market in the continent, the nation still suffers from worrying economic slow-down decisions like this, which are often provoked by the rising cost of doing business, exposed by the epileptic power supply, and weak infrastructural backing, amongst others.”
She added, “Factor cost, as an integral element of the profit equation, is viewed with utmost seriousness by businesspeople. In the face of rising costs, business people will likely search for cost-friendlier locations. The chamber is inclined to suggest the government take a holistic view/ review of the business environment and take steps to make the nation’s business clime more competitive for growth.”
