Procter & Gamble’s recent announcement of its planned exit from Nigeria has sent shockwaves through the nation, marking another chapter in the series of exits by multinational corporations from the country. The move, as announced by the company, intends to “restructure” the focus of its operations from consumer goods production to an “import-only market.”
The consequences of these departures on jobs, the cost of living, and the standard of living may prove to be severe, necessitating immediate and strategic intervention. The urgency lies not just in addressing the immediate fallout but in laying the groundwork for a resilient and diversified economy that can withstand future challenges.
When manufacturing companies like P&G divest their operations, the immediate casualty is the job market. Analysts have said that P&G’s exit will likely lead to a significant loss of jobs, affecting thousands of workers directly employed by the company and creating a tremor that reverberates into households and families, extending to even relatives in the villages – given the breadwinner status of many working-class Nigerians who are fortunate enough to work there in the first instance.
The cost of living, directly tied to employment rates, is also likely to rise. With fewer job opportunities, competition for existing positions intensifies, allowing employers to keep wages stagnant or reduce them. This not only affects individual households but contributes to a broader economic slowdown.
This raises critical questions about the consequences for Nigeria, particularly in the absence of enhanced local capacity to replace the departing manufacturing giants. Some argue that the departure of any major manufacturing giant from Nigeria leaves a void to be filled by local industries. Well, this remains to be seen. As most Nigerians will readily tell you, the “anyhowness” and “manage it like that” mentality that plagues the majority of us means that any talk of attaining local competence, standards, and technical know-how in the wake of these departures will remain elusive, especially when benchmarked against available global standards.
The Urgency of Government Intervention
Within the past three months, the lack of urgency and concrete solutions from the Nigerian government has been worrisome and alarming. There has been much focus on issues that do not directly translate into improved welfare for the average Nigerian. The early months of the president’s globetrotting have been touted as an attempt to reinvigorate the country’s ability to attract and retain foreign investments. The government’s seeming indifference to the plight of its citizens in the wake of these exits highlights a critical need for a comprehensive economic strategy.
Government Profligacy and Ruinous Consequences
The chickens have come home to roost. Nigeria’s leadership is now confronted with the consequences of decades of profligate spending and inadequate economic planning. The mismanagement of resources, corruption, and a failure to diversify the economy have left the country vulnerable to external shocks, such as the departure of manufacturing giants. The absence of a robust industrial policy has further impeded the development of a resilient local manufacturing sector.
Desperate Times Require Strategic Solutions
To navigate these desperate times, Nigeria needs strategic and decisive actions from its leadership. This includes implementing policies that encourage local industrial growth, incentivize foreign investments, and address the root causes of the economic challenges facing the nation. Fortunately (this isn’t tongue in cheek), those in power know exactly what to do. Now, whether it will be done is another matter entirely.
Precious Ohaegbulam is an African Liberty Fellow and a Columnist with The Avalon Daily