P&G exit: MAN asks FG to address business challenges, says ‘more may leave’

Segun Ajayi-Kadir, director-general of the Manufacturers Association of Nigeria (MAN), has expressed regret over the exit of Procter & Gamble from Nigeria, saying other manufacturers may follow suit.

Ajayi-Kadir spoke on Monday while he appeared on Channels Television’s Sunrise Daily.

He said there will be more exits in the manufacturing sector until the federal government implements clearly defined measures to address the issues facing the nation’s manufacturers.

“Obviously, we received it (P&G exit) with sadness but it is not totally unexpected and more may happen because there is no doubt that we operate in an environment that is challenged,” he said. 

“Manufacturing in any economy is a strategic choice, the government has to make up its mind whether it wants its country to be an industrialised one. 

“Once that decision is taken, you have to do all that is needed to remove the binding constraints that limits the performance of that sector, Nigeria has not done so and that is why you can see there are closures.

“I think it is news because it is Procter and Gamble, it is news because it is GlaxoSmithKline, it is news because they have been in the country for a very long time, but there are several others that have died quietly and for reasons that are clearly avoidable.”

‘LESSON TO BE LEARNT’ 

Ajayi-Kadir said the government should learn from the multinationals’ exit, noting their departure presents an opportunity to support domestic manufacturers more than foreign investors as they are more resilient.

“I think there is a strong lesson to be learnt there which is the fact that the big ones that are exiting are those multinationals and I think this will send a clear signal to government that regrettable as it is, it should guide future actions, we need to be strategic in what we promote,” he said. 

“So, what this means is that if you have a challenged local manufacturer, he is not likely to go anywhere. 

“That is why we are saying that foreign direct investment is excellent, it has led to phenomenal improvement in the performance of the manufacturing sector for so many economies but it should come secondary to empowering the local investor, the existing manufacturers because that is what is enduring.

“So, it is regrettable, it is not totally unexpected, and I think except we take clear redefined measures, many more will happen.” 

Last week, P&G announced its intention to halt local production in the country. 

The multinational manufacturing firm said it would focus solely on importing its products as it winds down its on-ground presence in Nigeria.

Similarly, in August, GlaxoSmithKline (GSK) Consumer Nigeria Plc announced plans to cease operations and transfer its business activities to a third-party company.