NECA warns of unemployment, tax losses as businesses leave Nigeria

The Nigeria Employers’ Consultative Association (NECA) expressed concerns over the recent trend of relocation and divestment of foreign businesses saying it leads to unemployment and tax losses.

Recall that GlaxoSmithKline Consumer Nigeria PLC recently made public its strategic intent to cease the commercialization of its prescription medicines and vaccines in Nigeria.

The Company made this announcement via an official statement signed by Company Secretary, Frederick Ichekwai which was sent to the Nigeria Exchange Limited (NGX).

Director-General of NECA, Adewale-Smatt Oyerinde in a statement on Wednesday in Lagos highlighted that the private sector continues to be a catalyst for economic growth, being a major contributor to national income and the efficient flow of capital.

Oyerinde noted that the capital flight trend is a major reason why the rate of unemployment continued to rise which relates to crime.

“When businesses cease operations, divest or move to other profitable and hospitable environments, a large number of Nigerians become unemployed.

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“Inadvertently, the country loses income from taxes, social investment is hindered and poverty holds sway, “.

He added that in most developing economies private businesses account for over 93 per cent of employment, including formal and informal jobs, citing that the private sector continued to remain the catalyst for economic growth, being a major contributor to national income and the efficient flow of capital.

NECA urged for more definitive and urgent intervention to address concerns of the private sector, they said: “While we acknowledge and commend the current administration’s effort to address the concerns of the private sector and the steps it took to provide some respite to businesses in specific sectors of the economy, more needs to be done.

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“Beyond the tax reforms activity and the provision of palliatives to select corporate entities, the government should, by deepening engagement with the Organised Private Sector, provide the right intervention.

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“Also, incentive, not only to attract more Foreign Direct Investment but to also prevent more companies from shutting down, divesting or leaving the country,”.

They also urged FG to work collaboratively with the private sector with the view to developing and implementing action plans capable of promoting enterprise sustainability and competitiveness.

“Sectors such as cosmetics, services, pharmaceuticals, aviation, textile, maritime, construction and, in fact, the real sector should be prioritised as they have the capacity to generate jobs.

“Expeditious action should be taken to finalise the appointment of Ministers and constitution of Boards of Agencies to drive the economic programmes of the administration.”