Imagine The Number Of Companies That Shut Down In 3 Years

The Nigerian Chambers of Commerce has revealed that not less than 800 companies closed shop in Nigeria between 2009 and 2011, due to the harsh operating business environment.

The companies that have survived are also having serious challenges as more than half of them have been classified as “ailing.’’

According to NAN, this was disclosed by the President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, Herbert Ajayi, on Tuesday, in Asaba, in a paper he presented at a zonal workshop on economic diversification organised by the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC.

Mr. Ajay said the current situation of the “surviving” industries poses a great threat to the survival of the manufacturing industry. He added that capacity utilisation in industries hovers around 30 percent and 45 percent on the average, with 100 percent overhead costs.

He blamed the continued decline in the manufacturing sectors on “political and economic factors’’, citing poor infrastructure and epileptic power supply as key impediments to the industry.

“The manufacturing industry as a whole operates on more than 70 percent of energy it generates, using generators; and operating these generators greatly increases the cost of manufacturing goods,’’ he said.

The industrialist gave other reasons for the woes in the sector as incessant increase in the price of petroleum products used by industries, multiple taxation, unabated smuggling and inadequate access to finance, both local and abroad.

He said widespread insecurity and the inability of government agencies in the ports to meet their 24-hour target, for cargo clearance, have contributed to the dwindling fortunes in the manufacturing sector.

On the way forward, Mr. Ajayi stressed the need for the organised private sector to support the government’s efforts to revitalise the sector through the much-canvassed public private partnership.

He also called for more transparency in the ongoing government-led privatisation exercise of public enterprises.

We need to create the structures that will help firms survive and thrive.


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culled from Olu famous Mr Olumide's Blog