Over the past decade, Nigeria has witnessed a notable exodus of manufacturing companies, with numerous factors contributing to their departure. Issues such as foreign exchange scarcity, inadequate power supply, port congestion, multiple taxation, security concerns, and deficient infrastructure have collectively strained businesses, leading to operational halts or closures.
Companies Exiting the Manufacturing Sector:
- Mayor Biscuits Company Limited (MABISCO):
- Closure Year: 2023
- Reason: Strategic shift to concentrate on core business competency.
- Louis Carter Industries:
- Closure Year: 2017
- Reason: Escalating production costs, foreign exchange challenges, policy uncertainties, and high energy expenses.
- Moak Enterprises:
- Closure Year: 2021
- Reason: Impacted by the foreign exchange crisis, resulting in heightened raw material costs.
- Tower Aluminium:
- Closure Year: 2020
- Reason: Operational sustainability became untenable.
- GlaxoSmithKline Nigeria:
- Drug production plant closed in 2021.
- Overall exit from Nigeria announced in August 2023.
- Reason: Shift to third-party direct distribution model due to strategic intent.
- Technoflex Company Limited:
- Closure Year: 2017
- Reason: Escalating production costs.
- Evans Medicals:
- Loss of assets due to debt.
- Forced takeover of assets by banks in 2017 due to financial challenges.
- Reason: Funding problems and bad debt led to a decline in productivity.
- Other Affected Companies:
- Surest Foam Limited, Mufex, Framan Industries, Deli Foods, Stone Industries, MZM Continental.
Factors Contributing to Exits:
- Foreign Exchange Scarcity: Hindered importation of essential raw materials.
- Power Supply Issues: Unreliable energy supply increased production costs.
- Port Congestion: Disruptions in supply chains and increased logistics costs.
- Multiple Taxation: Escalated operational expenses for businesses.
- Insecurity: Security concerns impacting operations and investments.
- Poor Infrastructure: Limited or inadequate facilities affecting production and distribution.
Conclusion: The exodus of manufacturing companies from Nigeria over the past decade is attributed to a multitude of challenges, from forex scarcity to inadequate infrastructure. These issues collectively contributed to operational difficulties and, in many cases, forced closures. Addressing these concerns will be vital in revitalizing the manufacturing sector and attracting new investments.