The decline of food and beverage companies in Nigeria highlights economic and political failures in a resource-rich country. Key issues contributing to this collapse include foreign exchange shortages, poor infrastructure, and high production costs. Immediate policy reforms and Public-Private Partnerships are essential for revitalizing the industry and ensuring sustainable economic growth. The aim is to enhance local production and secure a stable business environment.
The once-thriving industrial zone of Ikeja, particularly along the Oba Akran axis in Lagos, now reflects a stark decline, with many manufacturing companies having either closed or been repurposed. Cocoa Industries Limited, once a pillar of productivity, exemplifies this downturn alongside numerous others across Nigeria, contributing to significant unemployment and economic stagnation. The lamentable situation underscores a broader narrative of economic and political failure in a resource-rich country.
Recent reports have indicated a steep worsening in the economic landscape, with alarming statistics such as the delisting of 109 Nigerian companies between 2002 and 2019 and closures driven by foreign exchange shortages and energy crises. The culmination of these challenges highlights the inadequacy of governmental efforts to revitalize the manufacturing sector and improve the business environment.
Various factors contributing to the decline of food and beverage companies include ongoing foreign exchange shortages, unreliable power supply, and excessive taxation. Additionally, poor infrastructure, security issues, and decreased consumer purchasing power further compound these problems, while historical policy inconsistencies and limited funding have hindered long-term stability and growth for businesses.
The continuation of such economic conditions significantly affects the large population of young Nigerians forced into a competitive job market, exacerbating insecurity. Implementation of effective, people-centered policies is crucial to overcome excuses and foster a new approach that prioritizes Public-Private Partnerships (PPP) for sustained economic growth.
Addressing the high production costs and tax burdens that companies face is essential. Reports indicate that major companies paid N187.9 billion in taxes in the first half of 2019, with numerous banks also collapsing in the past decades. Urgent reforms are necessary to reset the economic paradigm and facilitate a supportive environment for businesses, which is vital for attracting Foreign Direct Investment (FDI) and nurturing local entrepreneurship.
Creating a sustainable framework will require improvements in electricity supply, quality infrastructure, and access to financial resources, along with the simplification of the taxation system. Policy initiatives must aim to enhance local production capacities for food and beverages while ensuring that technology is utilized throughout the production value chain, thus strengthening Nigeria’s economic landscape.
The ultimate goal is to maximize domestic production of essential goods while leveraging local raw materials. With the right technological applications and industry practices, Nigeria can increase its GDP and improve its Human Development Index (HDI). These transformations hinge on establishing a secure and stable environment, making this an auspicious moment for serious policy implementation in the interest of national progress.
The dismal economic state of Nigeria, characterized by the decline of numerous food and beverage companies, requires immediate intervention through well-thought-out policies and collaboration between the public and private sectors. Addressing underlying issues such as foreign exchange shortages, infrastructural deficiencies, and high production costs is paramount. Moreover, by harnessing local resources and modern technologies, the country can reposition itself to enhance domestic production, build a robust economy, and combat rising unemployment and insecurity. Effective, people-oriented policies are essential for charting a productive path forward.
Original Source: businessday.ng
