By Erasmus Ikhide
ON 12 June – a day set aside to commemorate 25th years of Nigeria’s unbroken democratic experience last week Wednesday – President Bola Amhed Tinubu tumbled and fell. That’s the consequence of choking off the president from visible dystonia or huntington disease, a genetic disorder that causes involuntary muscles contractions and brain tremors. That’s a story for another day.
The rabidly collapsing Nigerian economy climate is the major thrust of this series for which I’m staying focused. Guinness Nigeria Plc is leaving the country after 74 years due to the country’s harsh economic climate and unbearable inflation. The company recorded a loss of N61.9 billion after tax between July 2023 and March 2024.
Diageo, Guinness’ parent company, is selling its 58.02% majority stake to the Singaporean conglomerate Tolaram Group. The sale is expected to be completed by fiscal year 2025, subject to regulatory approvals in Nigeria, according to the report. Diageo’s exit follows other multinational companies that have left Nigeria in the last one to two years due to economic climate.
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(Part 1]: The Devastating Legacy of Tinubu’s Fuel Subsidy Removal; A Year of Economic Woe
Guinness Nigeria Plc’s recent announcement to leave Nigeria after 74 years is a stark reminder of the country’s deteriorating economic conditions. The company’s exit is not an isolated incident – but rather part of a larger trend of multinational companies fleeing Nigeria due to unfavorable economic policies and harsh operating conditions – to which the government is pretending that it didn’t exist.
Multinational companies that have exited Nigeria in the last 8 years are GlaxoSmithKline (2020), Microsoft (2022), Unilever (2020), Mondelez International (2019), Procter and Gamble (2018). In spite of the unintelligent handling of the economy, and the government’s impervious to correction, yours sincerely can’t be excused for critiquing APC/PBAT administration without pointing the ways out of the woods.
To stem the tide of departing multinational companies, Nigeria must address the following issues, and swiftly too. The government must, as a matter of urgency, foster a business-friendly environment by streamlining regulations and reducing bureaucratic hurdles. The president economy team should urgently establish clear and consistent policies that encourage investment and growth. The government of Tinubu should provide incentives for businesses to innovate and expand, as well as encourage public-private partnerships to drive economic development. Most importantly, the government should regularly engage with the private sector to understand their needs and concerns.
The president, alongside states and local governments should prioritize investments in infrastructure. President Tinubu should develop a comprehensive infrastructure development plan that addresses the country’s needs namely; modern transportation systems, including roads, railways, and ports. Improve electricity generation and distribution to ensure reliable power supply. Develop industrial parks and special economic zones to attract investments.
Upgrade digital infrastructure to support e-commerce and digital innovation.
Tinubu’s Presidency should enhance and revamp the nation’s security architecture. The government should ensure the safety of lives and properties by deploying effective security measures and tackle corruption by strengthening institutions and enforcing the rule of law. Improve intelligence gathering and sharing to prevent crimes should be a major tool in this regard. Enhance border security to prevent illegal activities. Ditto establishment of special task force to protect businesses from harassment and extortion.
The hostile business climate that didn’t promote friendly taxation has been responsible for businesses and multinational companies relocating from the country. We have no choice than to reform the tax system to make it more business-friendly and competitive. It has to reduce tax rates and eliminate multiple taxation; introduce tax incentives for investments in priority sectors, simplify tax compliance procedures to reduce the burden on businesses, as well as establish a tax ombudsman to address tax-related grievances.
Apart from insecurity and unremitting banditary, the government is burdened with onerous task to quickly address the issue of hostile community activities. The government should establish a community engagement program to address grievances and concerns, by setting up a special task force to protect businesses from harassment and extortion. This should be followed with collaboration with community leaders to promote peaceful coexistence and establish dispute resolution mechanism to address conflicts, provide incentives for communities that promote peaceful business environment.
On a final note, President Tinubu has a duty to remake a nation free of poverty on a livable economy hinges on boosting growth and creating jobs in the country. The task is immense, because Nigeria’s challenges are multifaceted and legion. As of today, 40.1% of people are poor according to the 2018/19 national monetary poverty line, and 63% are multidimensionally poor, according to the National MPI 2022, while conflict, climate change, unsustainable debt burdens, fuel prices, astronomical prices of good and services, abominable inflation, electricity crises cast a shadow over the country’s economic outlook.
To achieve our aims – president Tinubu must focus on how he can help Nigerians achieve these critical goals – archored on twelve fundamental pillars earlier enumerated in this series, which will require a strategy based on the key priorities.
Erasmus Ikhide contributed this piece via: ikhideluckyerasmus@gmail.com.
