This is according to a recent in-house survey – 2020 Nigeria Economic Impact Survey.
Dipo Faulkner, the President of the American Business Council who made this public, explained that according to the survey report, foreign currency access, implementation of policies by the government, heightened regulation in key industries were some of the key factors responsible for the decline in business activities in 2019 and 2020.
He noted that these factors were further compounded in 2020 by the disruption from the COVID-19 pandemic and the resultant knock-on effect on the economy.
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Chijoke Uwaegbute, a Partner at PWC and a key panelist who spoke on the figures, tasked the government to give close attention to the headwinds companies face in their operation in the country.
He explained extensively that in terms of full-time employment, the US companies underperformed as the figures declined from 18,500 in 2018 to about 14,000 in 2019.
Chijoke stated that on average, in a bid to positively impact the local manpower, the company spent about N32 million on a yearly basis on training with a minimum amount of N1.4 billion on training.
Among the few positives was the growth in indirect employment, which surged significantly as there were over 30,000 indirect jobs created during the period under review, while over 13,000 direct jobs were created.
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What they are saying
The Chief Executive Officer of the American Business Council (ABC), Margaret Olele tasked the government to create an enabling business environment to create jobs in the country and facilitate economic growth and sustainable development of the nation’s economy.
She expressed her disappointment over the performance of the companies since 2018, as many companies have invested a lot in different sectors of the economy, in setting up manufacturing facilities and plants in the country.
While speaking on the interventions of the US Government during the COVID-19 lockdown, she noted that the US government brought in as much as $22 million into Nigeria to support and assist in the fight against the COVID-19 pandemic and with subsequent intervention from the mission putting the total in excess of $34 million.
The Deputy Political and Economic Chief, US Consulate, Merrica Heaton expressed her worries over the performance of these businesses in 2020.
She said, “When I first saw the data, I was a bit disappointed to see the decreases but hopefully, this will help us to look at where we really need to focus our efforts, and how we can coordinate and advocate with the Nigerian government to improve the investment climate and bring more US businesses and those that are here to encourage further investments.”
She explained that the decline is short-term, as it was driven by the pandemic, hence the challenge according to her is a matter of what can be done and how to work efficiently with the US private sector here in Nigeria, with a view to improving the investment climate.
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In order to resolve the issues of policy inconsistency and key drawdown in regulation which inhibited the performance of US businesses in 2020, she said that this is a time to work more with the government, as there is a positive economic impact from some of this collaboration and engagement.
She added that in terms of the women in the leadership roles, the ABC and the consulate can both be role models to the entire leadership, as they move to encourage more women into the leadership role.
What you should know
- The US-based businesses generated over N1 trillion in 2019 and spent N2.57 billion to expand operations in the last five years.
- The companies also spent an additional N1.5 billion on CSR, from N1.9 billion expended in 2018, with a joint contribution of over N100 million to Covid-19.
- Going forward the US-based businesses plan to invest about N2.37 billion in the country over the next three years.