MAN: COVID-19, others may push investors out of Nigeria

Following report by the board of Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited to divert its retail businesses and exit Nigeria, the Manufacturers Association of Nigeria (MAN) has warned that the action could lead to some foreign firms leaving the shores of the country post-COVID-19.
Acting Director-General of MAN, Ambrose Oruche, dropped this hint in a chat with New Telegraph in Lagos, saying that lots of businesses have recorded huge revenue losses, especially in the manufacturing sector.
Oruche said that the COVID-19 crisis had changed the strategic investment plans of many foreign firms in terms of revenue projections and business plans for the year and are in the process of tinkering exiting Nigerian market following the battered economy.
According to him, the biggest challenge facing businesses currently in the country is not only COVID-19, but that of harsh operating environment, infrastructure deficit, multiple taxation and government policy summersault.
He said: “A lot of businesses this year would record losses in revenue earnings because of COVID-19.
“Particularly, it has affected a lot of businesses not only Shoprite but also the manufacturing sector. So multiple taxation and state of infrastructure deficits are really challenges to businesses in Nigeria.
“So we are calling on the Federal Government to come and address these issues, if not, more foreign firms will exit Nigeria, including many of them going under post-COVID-19 amid battered economy,” Oruche added.
The acting DG further stated that the reasons behind Shoprite planned exit had to do with lack of competitiveness with other retail outlets in the country, multiplicity of taxes, harsh business environment, loss of revenue due to the pandemic and import restriction policy of the present government.
“Another factor for the proposed exit of Shoprite out of Nigeria is multiple taxation and harsh business environment, they are key factors I quiet agree, but are not the main factors for Shoprite planned exit in Nigeria. But you need to factor them in your costing and also need to look at your overhead too.
“You know that this is what we experience in this part of our environment. Yes, it is a testimony of hardship of economic environment. But why are others still there? Why are others super stores still in existence? Have they closed down, No? Are they not combating with multiple taxation challenges, they are? Are they not faced with infrastructure challenges, they are?
“So lack of competitiveness is key in driving businesses in Nigeria because of the free exit, free entry of Nigerian market.”
Oruche appealed that government needed to address issues such as infrastructural deficiencies, cost of doing business and other regulatory frameworks and policies to tackle flight of foreign direct investment from the nation, including exit of foreign firms operating here in Nigeria.

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