Coca-Cola Jets Out Of Nigeria.

It was no cheering news to hear that the Nigerian Bottling Company has decided to shut its concentrate supply plant and relocate it outside Nigeria. The company cited the high manufacturing costs that render the products non-competitive for export to other Coca-Cola bottlers in ECOWAS States and Central Africa as a reason.

The news must have passed as ordinary company news but we are concerned about its enormous implications, one of which is that Nigeria’s manufactured goods are not competitive for even African countries like Ghana.

The distressing thing about this is that when Coca-Cola moves out of Nigeria, of course we will continue to drink coke, and we will continue to create and sustain jobs at Coca-Cola PLC. Those bottles of Coke will just have to be imported, as the Coca-Cola Jobs and Taxes are exported to foreigners.


It is easy to blame the global meltdown for yet another example of operational failure of a corporate giant. In our country’s situation, however, it is time we took another look at our investment climate that seems at least for now to be driving away potential and established investors and well-known global brands.
Recession or not, Nigeria has the largest market in Africa. That was partly the reason for the presence of many multinational companies in our country. But the ineptitude of successive Nigerian governments to sustain a conducive environment for operational efficiency of both public and private companies has created an embarrassing nightmare in terms of containing operational costs in the face of dwindling revenues and returns on investment.

The increasingly hostile business environment has manifested in the decline of
the textile industry, the local tyre industry, which has lost Michelin and Dunlop, and many others.
Certainly, these are major business news items in the international community and run counter to all efforts to build an attractive investment destination.
It is an open secret that power is the engine of manufacturing to provide goods, and services for consumption by customers and society at large. Yet, the downtime of our electricity grid is about 90 per cent if not 100.

To compete or stay afloat companies have had to invest heavily in alternative sources of power and ignore the possibility of any supply from the Power Holding Company of Nigeria (PHCN), which is a monopoly. It is well-known that the PHCN has become a veritable source of unnecessary and wasteful expenditure which cripple planned and expected returns on investment, production and services, because of its inefficiency.
In addition, transportation costs have risen sharply due to bad roads, police check points, and the spiralling costs of fuel. Also, exchange rate fluctuations and unpredictability make importation of materials difficult to achieve and thus sustain operational capacity. Thus, there is low capacity utilisation and plants have closed down, heightening unemployment, and discontent in the population.

Even for companies that are braving the harsh business environment, they experience a hostile and testy industrial relations environment.
Global brands have for many years created employment for Nigerians and Coca-Cola, especially, is a major player in the beverages and entertainment industries. It is sad indeed to see them shut a vital plant like the one under discussion.
We have repeatedly lamented the death of manufacturing in the country and the seeming insensitivity of government to it. The duty of government is to provide a conducive environment for the private sector to thrive.
So again, we call on the Federal Government to stop the drift. Before Nigeria becomes a pariah state to international manufacturing concerns, there is need for government to take some positive action.
Multiplicity of taxes, high lending rates, dumping, insecurity and lack of basic infrastructure such as electricity, potable water, and transport network have afflicted the sector with unusually high production cost.

The closure of the Coca-Cola plant is yet another reminder of the urgency of the
problem with the manufacturing sector.

This is the season for OPEN TREASON. We send Michelin Jobs elsewhere, even as we continue to buy Tires for our Cars. Send Coca-Cola Jobs elsewhere, even as we continue to drink coke. Send all manufacturing to Ghana. Even our banks, hawk the Banks to the Chinese. Stupid, stupid, people.

It seems only bad news can come out of Nigeria. What is all this nonsense! Is Nigeria that rudderless to deal with such a minor problem and save jobs?

This is very unfortunate. Will it serve as a wake up call to our governments and public leaders for a change? Granted our Governments have failed the industries as much as they betray the masses. This is yet another challenge to the country. We can create incentives for folks to purchase the Coca-Cola plants and put them to some kinds of production that would manufacture similar products and generate employment. Who says we cannot compete with Coca-Cola in Africa?

This is another national challenge that could, long term; make us a better and enabling nation.

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Last Updated on Thursday, 17 September 2009 20:10