Nigeria Employers’ Consultative Association has raised the alarm about the rising rate of business divestment, capital flight and business closure in Nigeria.
In a statement, NECA said that in most developing economies across the globe, private businesses accounted for over 93 per cent of employment, including formal and informal jobs.
The private sector continued to remain the catalyst for economic growth, as a major contributor to national income and the efficient flow of capital, it said.
The Director-General, NECA, Adewale-Smatt Oyerinde, stated that the recent trend of business relocation and divestment was unfortunate.
He said, “Over the last decade, the private sector has been adversely affected by various policy thrusts of government. Many of these policies were either anti-growth, ill-timed or not well thought out, while others were not in alignment with the country’s economic realities.
“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.”
The director-general noted that the consequences of the years of wrong policy choices were not far-fetched.
As expected, he said, “Divestment, capital flight and outright closures had become the ‘new normal’ within the business community.”
According to him, this was one of the major reasons why the rate of unemployment continued to soar perpetually with consequential rises in crime and other security issues.
When businesses ceased operations, divest or moved to other profitable and hospitable environments, a large number of Nigerians became unemployed, he said.
He added that Nigeria loses income from taxes, social investment is hindered, and poverty holds sway.
Oyerinde further stated, “It is germane to state that Government must take urgent steps to arrest this predicament, while we acknowledge and commend 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, more needs to be done.”
