Peter Obi advocates policy reforms to shift Nigeria from consumption to production

Estimated reading time: 4 minutes

Peter Obi, the Labour Party’s presidential candidate in the 2023 general election, has stated the necessity of implementing favorable fiscal and monetary policies to transition Nigeria from a consumer-based economy to a productive one.

Obi conveyed this message through a series of tweets on Friday, March 1, using his X handle.

He pointed out the concerning implications of the losses of Nestle Nigeria due to the ongoing hostility of the business environment, which he believes has discouraged both foreign and domestic investors from investing in the country.

He wrote: “Last December, I lamented the sad exit of Procter and Gamble, the world’s largest personal care and household products company, from Nigeria, which followed my earlier remarks on the exit of GlaxoSmithKline, GSK, one of the world’s largest pharmaceutical companies, from Nigeria.

“Yesterday, I read the disturbing audited report of Nestle Nigeria, which represented a huge loss in the company’s history in Nigeria. This is a company that started operations in 1961, a year after Nigeria’s Independence, operating as Nestlé Products (Nigeria) Limited.

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“As of 10 years ago in 2014, Nestle Nigeria had a revenue of N140 billion, about a billion dollars, which was about 1% of their global revenue of $100 billion then. Nigeria was destined to be one of their largest emerging markets.

“Their profit then was N26 billion, about $175 million. Nestlé Products (Nigeria) Limited is part of Nestlé’s global network, the world’s biggest food company operating in 188, out of 195 countries of the world, with a market capitalization of $ 275 billion,and a global turnover above $100b. Having considered Nigeria to be a strategic market for them, owing to our population demographics (young) and numbers, they built 3 factories in the country – Agbara, Sagamu, and Abaji, near Abuja.

“They also developed an ultramodern warehouse at Agbara, which further shows the strategic place of Nigeria to the company. In their recent financial report, however, following the collapse of the naira exchange rate to the dollar,their revenue has gone down to a third of what it was in 2014, about $300 million, and worse still, they have now gone into a huge loss of about $70 million. To see such a company record a colossal loss of over N100 billion and also wipe off entire shareholder capital, by the losses they incurred, is sad. The implication of this sad result is the message it sends to other such global companies about the challenges of doing business in Nigeria. It shows how our business environment is deteriorating continually, thereby discouraging other foreign, and even local investors, from establishing in the country. This sad situation could have been better managed through more rigorous thinking to design solutions for the situation we dug our economy into.

“National greatness and development cannot be pursued in an atmosphere that discourages production. This is why I continue to emphasize that everything must be done to encourage production in the country.”Moreover, the best way to create employment for our teeming youth is by creating an environment conducive and attractive for more multinationals to invest in Nigeria. Instead, our policies are chasing away the existing ones.”In moving our country from consumption to production, we must ensure that we put measures in place, through favourable fiscal and monetary policy implementation, that will build a good business environment and encourage local and foreign production companies to do business and thrive in Nigeria.”