The Nigeria Employers’ Consultative Association (NECA) has expressed concerns over the increasing trend of business divestment, capital flight, and business closures in Nigeria.
NECA highlighted the crucial role of private businesses in employment generation, accounting for over 93% of jobs in developing economies. The private sector is seen as a key driver of economic growth, contributing significantly to national income and the efficient flow of capital.
Adewale-Smatt Oyerinde, the Director-General of NECA, pointed out that the private sector has faced challenges due to various government policies over the past decade. Some of these policies were considered detrimental to growth, poorly timed, or not well-aligned with the economic realities of the country. He also noted instances of conflicting policies, regulatory hurdles, and legislative constraints that hindered businesses’ ability to plan and make informed decisions. As a result, operational costs have surged, negatively impacting many companies.
Oyerinde highlighted the negative consequences of these policy choices, including an increase in divestment, capital flight, and business closures. He emphasized that this trend has led to persistent unemployment, contributing to rising crime rates and other security concerns. The closure or relocation of businesses results in job losses, reduced tax income for the government, hindered social investment, and an increase in poverty.
While acknowledging the efforts of the current administration to address private sector concerns and provide relief to specific sectors of the economy, Oyerinde emphasized the need for further action to reverse the predicament. NECA called on the government to urgently address the challenges faced by the private sector to prevent further economic decline and promote sustainable growth.
It’s important to note that the information provided is based on the statement from NECA as of the time of the article and does not reflect developments that may have occurred after that.