GSK exit may trigger exodus of more companies as pundit calls for swift intervention on naira depreciation

By Chioma Obinagwam

A sustainability expert and consultant on business strategy, Mr. Marcel Okeke has said that the depreciation of the Naira has had significant foreign exchange losses for companies.

Confiance News gathered from the monthly forum of Finance Correspondents Association of Nigeria (FICAN) held in Lagos.

“It is a challenge because those losses are incurred because of the fluctuations of the Naira, or the unification of exchange rates.

“And I have not seen anything the government is trying to do to check many of these companies which are conglomerates and multinationals, who play across the globe.

“So, if they have currency loads or facilities, what is happening to the Naira is what is reflected in the reports that they are coming up with.

“As long as the fate of the Naira is such that it keeps sliding against major currencies of the world, this is the kind of report that they are going to have at the end of the year,” he noted.

The economist calls for quick government’s intervention to prevent further company collapses.

He cited the exit of GlaxoSmithKline (GSK) as an example, attributing its inability to repatriate revenues and dividends to foreign exchange shortages.

Okeke said that he hoped that GSK’s departure would not trigger a trend of other companies leaving as well.

He said, “It came to my knowledge that in a couple of five years, they have been unable to repatriate their revenues and dividends and that has been the fate of other major multinationals because of the shortage of foreign exchange in the economy.

“So, when you sum all those things, that will show you how soon this economy will be doing well or how far it will not be doing well.

“I pray that the exit of GSK will not turn into bandwagon for others to also leave.’’
On security, he observed that the government’s efforts are commendable but more needs to be done because ” we have to be alive for us to do anything. For foreign investors to respond to our policies by way of investment, they have to also be alive. The activities of bandits, Boko Haram among others are existential threats. Also, the judgement of the presidential election tribunal will will determine a lot of things in the economy going forward.”

Confiance News investigation shows that the naira, which is Nigeria’s currency has fallen by approximately 40 percent from the N720/1$ where it stood in June 1, 2023 (pre-subsidy and pre- forex hamonisation era) to N950/1$ as at August 14, 2023.