The economists, who spoke with The PUNCH, disclosed this
following the shutting down of the operations in Nigeria by British
pharmaceutical giant, GlaxoSmithKline Consumer Nigeria Plc.
The Managing Director/Chief Economist, Analysts Data Services
and Resources, Dr Afolabi Olowookere, said the exit of GSK presented the
Federal Government and other relevant stakeholders an opportunity to take a
closer look at the manufacturing sector.
He said, “We may have a reduction in manufacturing if at
all, they (firms) were manufacturing before. This is where we need to do a more
critical analysis on.
“Many companies that we call manufacturing companies, are
they really manufacturing? What percentage of what they are selling is actually
produced here, or they are mere marketing companies for manufacturing companies
somewhere else? To me, that is a critical issue.
“In addition to GSK, we ought to look at other companies,
our weak economic situation, macroeconomic instability that we have always said
are affecting manufacturing companies, are actually affecting them more than we
see.”
Olowookere noted that for states, where those companies were
located, it would be important to sit down with some of the executives of those
companies and understand their problems.
Looking beyond the impact of the multinational’s exit, the
Chief Economist at SPM Professionals, Paul Alaje, said that the government was
losing tax revenue, while suppliers of the exiting multinationals had been left
in the lurch.
He said, “The potential tax revenue that government would
have collected from multinationals, other revenue that would have gone to
Nigerians, which would have helped to improve the livelihood of people working
in those organisations, all of them are gone. There are other sectors that
depend on these multinationals; those who supply them (materials) will be
affected.”
Alaje added that prices of products manufactured by the
existing firm might go up due to reduced supply.
“When such an
organisation leaves a country, it doesn’t bode well for the country. I can tell you that if they are producing a
particular product for the country, say a drug and the number of producers has
significantly reduced, what it means is that the supply size has been
emaciated. When supply reduces while demand remains the same, the impact will
be on pricing; high price in the medium and the short term,” he stated.