The decline of major brands in Nigeria has continued to be a source of concern to many because of its negative effect both on the government and citizens.
Statistics show that about 272 firms including, manufacturing companies were shut in the past few years, while some reduced their production, staff strength and remuneration of workers.
The consequences were deepened by the collapse of oil prices, depletion of foreign reserve and eventual devaluation of the local currency, the naira.
A survey also confirmed disappearance of many products from the market, an indication that the producers are either not producing much or have stopped manufacturing.
Stakeholders said the business environment was plagued by epileptic power supply, bad roads, high interest rate and high cost of energy which contributed to high cost of production and impediment to competitiveness of the sector.
According to them, over two million Nigerians have lost their jobs in the past few years following the decline of major brands in the country.
Speaking on the issue, a Nigerian, China-based business man, who is also the Chief Executive Officer of Blue Diamond Logistics China, Mr. Festus Mbisiogu, attributed the decline of some major multinational brands in the country to insecurity in the north.
He explained that no serious investors based in that part of the country would like to remain there as the region is constantly attacked by the terrorists group, Boko Haram.
According to him, lack of steady power is another reason for the decline in the number of some corporate brands.
He said: “Statistic have shown that goods manufactured in China are cheaper than the ones manufactured in Nigeria because of cost of purchases and maintaining the power generating set including cost of fueling it.”
Another reason is low income earning, which according to him, reduces purchasing power.
“Many workers’ monthly salaries can’t take care of the food they eat throughout the month not to talk of buying something else. In such an environment goods produced may be difficult to sell and when there is no sale, the manufacturer will not continue to manufacture,” he stated.
Considering interest rate in Nigeria as another factor responsible for the brands decline, he said: “Interest rate in Nigeria is over 23 per cent, while in China it is only single digit. That is why China has many multinational companies. That is the reason some manufacturing companies are leaving Nigeria to China and other neighbouring African countries.”
Pointing out that lack of access road was another problem responsible for the situation, he observed that many companies had been left with no option than to open access road to their factory.
“It has become increasingly difficult for them to operate with profit margin after spending such huge amount of money on road construction and maintenance, which should have been the responsibilities of the government,’’ he reasoned.
Continuing he said: “Most of these companies are the ones that open roads leading to their factories and they spend so much in such road construction which should be the duty of the government.
“After spending such heavy amount of money, it becomes almost impossible for them to continue in their business because of lack of funds.
“There is also political instability like the one caused by the Indigenous People of Biafra (IPOB) in the eastern region, which will discourage multinational from investing in Nigeria because they do not know what will happen next.
“For decades now, China has never had any political instability and so many investors want to go there because it’s peaceful nature.
“Imagine some investors had been kidnapped and huge amount of money was paid to release them, while some died in the hands of their kidnappers,” he stressed.
On her part, Principal Partner, Sterling Partnership, a law firm, Mrs. Boma Ozobia, corroborated that Nigeria had indeed witnessed a decline in the market share of major brands due to variety of reasons.
To Mrs. Ozobia who was president of Common Wealth Lawyers Association (CWLA), the introduction of trading online platforms like Konga; Jumia; and lately Yudala had contributed to the decline as they provide an opportunity for SMEs to compete with the majors without incurring prohibitive overheads.