- 1,136 Firms at Risk of Closing Down in Nigeria -World Bank
The World Bank Enterprise Survey has shown that at least 1,136 companies were at risk of closing down in Africa’s largest economy, Nigeria.
Out of the 5,833 companies surveyed, about 322 organised private businesses were forced to close down due to the harsh business environment in Nigeria, while another 1,136 were at risk of closing down.
The results of the survey published by the African Development Bank in a report entitled ‘Creating Decent Jobs: Strategies, Policies and Instruments’, identified political environment and corruption as the main hindrance to business success in Nigeria and other African nations.
“In Nigeria, conflicts along ethnic, and by extension, regional lines, have contributed to Nigeria’s politically turbulent past and stalled its economic growth,” the report said.
The report highlighted limited human capital as one of the main challenges facing Nigeria’s manufacturing sector.
“Nigeria’s manufacturing sector has declined because of a human capital issue: manufacturing firms use low skill, low-wage labour not because higher skill labour is unavailable, but because they cannot afford the wages demanded by higher skill labour.”
Mr Godwin Eohoi, the Registrar, Chartered Institute of Finance and Control of Nigeria, blamed the situation on the unfriendly business environment.
He said the harsh operating environment was responsible for the closure of many businesses in Nigeria.
Eohoi said, “We just came out of recession and government can encourage companies to grow by giving them tax holidays. Government should also provide infrastructure development.
“The cost of production is high and many companies can’t cope with high overhead cost. Government should provide good roads because without good roads, you can’t take what is produced to the market. Without electricity you can’t manufacture goods. Tax holidays should also be given to some categories of companies.”
