News of multinational companies exiting Nigeria has become the harsh reality for a country blessed with both human and natural resources. The scenario is not different for small and medium-sized businesses.
Why does this trend seem to be the new norm? The first reason would be exchange rate challenges.

The value of the Naira has taken a slow but steady depreciation trend against major international currencies.

Planning becomes difficult and even chances of hedging against currency risks become futile efforts. The scarcity of foreign exchange might not have been much of a problem if our upstream suppliers were within the country. On the contrary, we as a country heavily rely on imports (raw materials, semi-finished and finished products).

This makes companies cave under the burden of increased operational costs due to exchange rate inconsistencies. For multinational companies, fund repatriation challenges do not also yield encouraging proceeds.

The second reason is operational complexities. Businesses will be slow to thrive in environments plagued by absent/poorly maintained infrastructural structures. When economic policies are implemented without creating buffers to cushion effects, businesses will also struggle to flourish.

These instances are the present-day reality in Nigeria. Also, economic hardship evident in the reduced buying power of the people has robbed businesses of the gains of doing business in a country with a population of over 200 million people.

Optimism, for a nation with a lot of promising potential, is yet the way forward. The exit of the big multinationals even though it robs us of the familiar brands we have grown used to, opens a wealth of opportunities to replace these brands with locally made alternatives. This does not necessarily come on a platter but a ray of hope is reduced competitiveness.

Focusing on the challenges that becloud this goal will only delay the chances of us living up to the name “Giant of Africa”. There is dire need to create demand-driven and responsive local business models that offer adaptability and resilience even in the face of market disruptions.

How do we begin? First, Indigenous manufacturing companies need to show a strong commitment to upholding the quality standards of products. This will gradually subdue the idea that locally manufactured products are inferior to imported alternatives. Second, increased patronage for locally manufactured products will increase demand. It will also create opportunities for more businesses to spring up to meet demand.

Local production of everything from basic household commodities to medicines is a sure path to improving the security of supply. Third, research and development goals will birth ideas needed to identify and even reengineer local materials that can serve as inputs in manufacturing. Fourth, investment in human resource capital is needed to fan the prosperity of local businesses. Every member of the Nigerian populace of working age should strive to amass skills, grow their talents, and not relent in their efforts to make a difference.

An enabling business environment no doubt is required to make market entry for new business owners and sustenance of existing businesses possible. Collaboration between the public and private sectors has yielded positive outcomes in managing some of the infrastructural gaps needed for businesses to thrive.
More of these efforts are required.

The Lagos Red Line Rail Project represents a remarkable achievement in transportation infrastructure development in the national economic and commercial capital. Reliable rail networks to other major business hubs in the country (Port Harcourt, Benue, Onitsha, Aba, Kano) will facilitate the movement of goods at reduced costs and lower CO2 emissions.

Cash breaks for local businesses should come in the form of loans with favorable contract terms and soft pedaling on multiple taxes and levies.

All hands must be on deck to rewrite these stories of low success rates of indigenous companies. We can create partnerships to help us bridge the gap between our desired end state and our present state. With the right mindset, able hands, resilience, strong support systems, and a shared purpose we will succeed.