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Thu, Aug 10, 2023 4:40 PM

Concerns over Relocation and Divestment of Foreign Businesses

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Concerns over Relocation and Divestment of Foreign Businesses
The Nigeria Employers' Consultative Association (NECA) expressed concerns over the recent trend of relocation and divestment of foreign businesses, citing unemployment and tax losses as consequences. NECA emphasized the vital role of the private sector in economic growth and called for urgent intervention to address the challenges faced. GSK UK Group's decision to cease the commercialization of prescription medicines and vaccines in Nigeria was highlighted as an example of the ongoing trend. The article emphasizes the need for collaboration between the government and private sector to foster enterprise sustainability and competitiveness.

The Nigeria Employers' Consultative Association (NECA) has raised concerns over the increasing phenomenon of relocation and divestment of foreign businesses, expressing apprehension about the negative impacts on employment rates and tax revenues. In a statement released on Wednesday in Lagos, NECA's Director-General, Mr Adewale-Smatt Oyerinde, emphasized the significant role played by the private sector in driving economic growth and facilitating the efficient flow of capital.

Oyerinde noted that the trend of capital flight resulting from the relocation and divestment of foreign businesses had contributed to the alarming rise in the rate of unemployment. He explained that this rise in unemployment often gives rise to criminal activities, further exacerbating the socio-economic challenges faced by the nation.

The Director-General highlighted a crucial statistic that emphasizes the importance of the private sector in employment generation, particularly in developing economies. He stated that private businesses accounted for over 93 percent of total employment, encompassing both formal and informal employment opportunities.

NECA urged prompt and definitive intervention to address the concerns of the private sector over the relocation and divestment trend. The association appealed to the Federal Government to work collaboratively with the private sector in formulating and implementing action plans aimed at promoting enterprise sustainability and enhancing competitiveness.

The news about GlaxoSmithKline (GSK) UK Group's decision to discontinue the commercialization of prescription medicines and vaccines in Nigeria was highlighted as an exemplification of the ongoing trend. In its unaudited Half-Year 2023 financial statement, GSK noted its intention to appoint a local third-party distributor for the supply of its consumer healthcare products in Nigeria.

GSK assured stakeholders that it is actively engaging with relevant parties to establish a sustainable solution that ensures uninterrupted access to their medicines and vaccines for patients in Nigeria. The company acknowledged that minimizing the duration of product unavailability is of utmost importance in meeting patients' healthcare needs.

This development further underscores the urgent need for collaborative efforts between the government and the private sector to address the challenges faced by businesses in the country. NECA's call for intervention and collaboration echoes the shared responsibility of the government and private sector in fostering a conducive business environment and promoting economic growth.

By working in synergy, the government and private sector can develop actionable plans that facilitate enterprise sustainability, enhance competitiveness, and mitigate the negative impacts of foreign businesses' relocation and divestment. This collaboration will not only safeguard jobs but also foster a vibrant business landscape that attracts both local and foreign investments.

In conclusion, NECA's concerns over the relocation and divestment of foreign businesses reflect the potential negative consequences on unemployment rates and tax revenues. Urgent action is required to address these challenges and ensure the sustainability and competitiveness of enterprises operating in Nigeria. The decision of GSK UK Group serves as an example of the trend and further emphasizes the need for collaborative efforts to secure the continuous supply of essential medicines and vaccines to Nigerian patients.

Source of content: OOO News 2023-08-10 News

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