Recently, there has been a lot of talk of international corporations leaving Nigeria, presumably because of the alleged difficult business environment caused by President Bola Ahmed Tinubu’s policies since he took office on May 29, 2023. Some Nigerians, particularly those from opposing parties, have been making a big deal out of it on conventional and social media, as if an apocalypse had occurred in Nigeria.
Consider the situation of Guinness Nigeria, where a significant portion of Diageo, a European investor, was sold to the Tolaram Group, a Singapore-based company. Has anyone asked if our country has suffered any losses as a result of Diageo shares changing hands in Guinness Nigeria between two investors? Isn’t that what happens every day on the Nigerian Stock Exchange (NSE) when stocks are traded?
The only difference in my opinion is the size of the shares swapped between the prior and subsequent owners, which is 58.2 per cent and that is huge. In truth, this may have been a merger and acquisition, as is customary in the financial services industry. So what’s all the fuss about?
According to historical documents, Diageo’s formation began in 1997, when Guinness amalgamated with food and beverage distributor Grand Metropolitan Plc. The $15.8 billion transaction went successfully, and the two firms combined under the name Diageo.
Data from Finance.yahoo.com Finance.yahoo.comreveals Diageo’s ownership.The leading institutional holders of the stock are: (1)Bank of America Corporation, $5.1M for 664,620,064 shares, (2) FMR, LLC $4.84M for 631,245,335 shares, (3) Morgan Stanley, $2.6M for 339,179,731 shares and (4) Clear Bridge Investments, LLC, $2.35m
Thus, what transpired with the share sales and purchases between Diageo and the Tolaram group is simply business as usual, and nothing suspicious in my opinion. Please take note that all of Diageo’s institutional investors are investment banks and entreprises based in Europe and north America.
Interestingly, other multinational corporations that have made waves moving out of Nigeria during the last ten years—and not just in the one year under President Bola Tinubu’s leadership—are mainly American and European companies, ranging from Proctor & Gamble in Ibadan to GSK in Lagos.
That is to say, a pattern has been gradually developing over time without the system noticing. And guess what foreign companies have been stepping in to fill the void left by American and European companies? Asian companies. These include both Chinese and Indian corporations. Even Singaporean and Lebanese firms have presence in the list.
An Asian company that specialises in producing sanitary products for adults and children, similar to Proctor & Gamble, is currently in the process of opening a factory to cover the void left by P&G’s withdrawal. Just before Tolaram Group acquired Diageo’s stake in Guinness Nigeria, a group of Nigerian investors, Renaissance Group had purchased Shell’s onshore holdings when the British and Dutch-owned oil giant made the decision to shift its activities to the offshore market and stay there solely.
The choice to limit operations to the offshore sector is thought to have been made in order to avoid the problems that arise from subpar work or a failure to uphold corporate social responsibility, which can lead to environmental damage from careless exploration and subsequent exploitation of the oil resources in the Niger Delta, which in turn can cause unrest that exacerbates the ongoing instability in the area.
The building sector has experienced similar events to those that have recently transpired in the oil and gas and manufacturing sectors.Since Europe was the continent that first colonised Africa, the majority of the continent’s businesses and infrastructure are either owned or run by partners in Europe or America. That is because of the transition from colonialism to neo-colonialism by the Europeans that ruled Africa.
The colonialists used their contractors to construct roads, bridges, railways, airports, seaports, and notable architectural projects throughout Africa. Most of that occurred in the 1960s, 1970s, and 1980s, and it’s possible that it continued until 2000. But the entry of Asian companies into the market has made them less competitive.
While those opposed to the economic reforms claiming that our country is down and has no hope of being resuscitated, using the analogy of whether a glass is half empty or half full, as a patroit my optics is that the glass is half full for very good reasons.
In my opinion—I lack scientific support for this—it seems as though Asian companies have been displacing Western companies over the last 20 years or so.
The building companies from France, Italy, and Germany that once controlled the Nigerian construction market are nowhere to be found.Currently in decline, Chinese and other Asian companies are displacing them.Why are the Chinese building and refurbishing all the major airports in Nigeria? Which companies are revitalising our rail networks? Chinese
Who in Lekki, Lagos, constructed a brand-new deep-water port in a comparatively short amount of time? The Chinese people. Examine the skylines of Lagos and other major Nigerian cities to determine whose construction companies are erecting the tall buildings: Chinese, Singaporean, and Lebanese companies, not European or American companies as was previously the case.
Likewise, Indians are firmly establishing themselves in the information technology and pharmaceutical industries, much like the Chinese are dominating the construction of railroads, airports, and seaports throughout Africa, including Nigeria.
In my opinion, if a research is done to determine whether there has actually been a loss since the departure of companies like GSK and P&G, among others, I doubt that it will not show that the Asian companies that took their place have increased employment and increased the GDP of our nation.
I am issuing a challenge to everyone who disagrees with President Tinubu’s current reforms, citing their reasons for the departure of companies like GSK and P&G as well as Diageo’s sale of 58.2 per cent of its shares to the Tolaram group, to carry out or commission a study to support their claims.
It should be the mission of PriceWaterHouseCoopers, Ernst and Yong, and other multinational research firms—including the native Nairamatrics—that take pleasure in being purveyors of business statistics to disprove or validate the assertion.
Based only on trend analysis, my educated guess is that after around 64 years of Nigeria’s political independence from Britain, the continent is only now experiencing true economic independence.
Even though Nigeria gained its independence in 1960 and the British removed the Union Jack, neo-colonialism—the next stage of colonialism—persisted, with European and British corporations controlling the private sector and even holding a vice grip on governments.
The Ogoni land oil exploration catastrophe, which resulted in the execution of environmental rights campaigner Ken Saro-Wiwa and the iconic Ogoni 9 tragedy, was one such instance involving SHELL Nigeria. It is no secret that multinationals like as GSk and P&G run their activities out of their headquarters in New York and London.
To be continued tomorrow.
Onyibe, an entrepreneur, public policy analyst, author, democracy advocate, development strategist, a former commissioner in Delta State government, sent this piece from Lagos, Nigeria.
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