The Nigeria Employers’ Consultative Association (NECA) has voiced deep-seated concerns regarding the growing trend of foreign businesses relocating and divesting in the country, citing the dire consequences of such actions on unemployment rates and tax revenues.
The Director-General of NECA, Mr. Adewale-Smatt Oyerinde, conveyed these apprehensions in a compelling statement issued on Wednesday in Lagos.
NECA underscored the critical role played by the private sector in fostering economic growth, labeling it a potent driver of national income and an efficient conduit for the circulation of capital. Oyerinde further pinpointed the unsettling issue of capital flight, a key driver behind the escalating unemployment rates which, in turn, exacerbates crime rates. He articulated, “The cessation, divestment, or migration of businesses to more profitable and accommodating environments leaves a significant portion of Nigerians jobless. Inadvertently, the nation witnesses a decline in tax revenue, hampers social investment, and finds itself ensnared by poverty.”
The Director-General highlighted that in numerous developing economies, private enterprises account for a substantial 93% of overall employment, encompassing both formal and informal work sectors. This further underscores the paramount role the private sector plays in propelling economic growth, serving as a major contributor to national income and the seamless circulation of capital.
A Call for Prompt Action
NECA fervently called for robust and swift intervention to address the mounting challenges faced by the private sector. They emphasized, “While we acknowledge and commend the ongoing endeavors of the current administration to address private sector concerns, including commendable steps taken to alleviate hardships faced by businesses in specific sectors, a more concerted effort is required.”
In addition to tax reform initiatives and targeted support for select corporate entities, NECA urged the government to forge deeper engagement with the Organized Private Sector, offering tailored interventions. They underscored the significance of providing incentives not only to attract Foreign Direct Investment but also to avert further company closures, divestments, or relocations.
NECA also extended their plea to the Federal Government to collaboratively collaborate with the private sector, fostering the development and execution of action plans capable of nurturing business sustainability and bolstering competitiveness.
“Crucial sectors such as cosmetics, services, pharmaceuticals, aviation, textiles, maritime, construction, and the real sector must be prioritized, as they possess the potential to generate substantial employment opportunities,” urged NECA. The association also emphasized the urgency of swiftly finalizing the appointment of Ministers and the constitution of Boards of Agencies, key drivers of the administration’s economic initiatives.
NECA’s poignant message underscores the pivotal role of collaborative efforts between the government and the private sector in fortifying the nation’s economic resilience and ensuring a conducive environment for businesses to thrive.