IMC professionals react as corporate japa hits the industry

By Felicia Nwosu

As various sectors of the nation’s economy continue to grapple with the worrisome challenge of a prevailing phenomenon locally known as ‘japa’ and its devastating brain drain effect, professionals in the Integrated Marketing Communication (IMC) industry have expressed worry over the looming danger of what’s now refered as ‘corporate japa’. The latest coinage emanated from the prevalent trend of multinationals exiting Nigeria with reasons ranging from persistent foreign exchange volatility, astronomical cost of production and other factors.

Sharing their opinions on LinkedIn, some noted that the past few years have thrown up a host of new challenges for the entire economic structure. They also pointed out that various industries are facing a variety of pressure points, exacerbated by rising inflation, a tough operating environment and FX repatriation. According to them, these have led to either the folding up or total exit of multinationals from the shores of Nigeria.

Expressing his view over the impact of japa syndrome on the creative landscape of the IMC industry, Steve Babaeko, president of the Association of Advertising Agencies of Nigeria (AAAN), in an exclusive interview with MARKETING EDGE, stated that the ecosystem is challenged by various headwinds on different fronts, which is no culminating in harsh economic realities. The X3M Ideas’ boss emphasized the urgent need to address the situation to dissuade more companies from leaving Nigeria.

“When I try to point people’s attention to the japa syndrome, the biggest blow that this country has suffered is not really in the labour force flight. The biggest, in my opinion, is when it affects the people who are actually entrepreneurs that should be creating and generating jobs in this country.  It is about those who are closing shop here in Nigeria and ‘Japaing’.

“We have to face it, it is when you have a job that you can japa. That’s where it affects the office. But if the owner of the shop locks up the shop, it is not just one person that has Japa-ed, it is about 10 or 20 people who are out of work in the country. And I think the government should declare a state of emergency on the flight of talent in this country, because it has far-reaching implications for everybody,” he said

Ekeno Eyo, Managing Director at the Redwolf Company, observed that surviving in Nigeria’s business environment is like being in a reality show where innovation and agility seemed to be the ultimate survival tips. Calling for a reality check time, he noted that Nigeria has had more than three economic recessions in just seven years, where foreign inflows are as elusive as a unicorn. This, he stated, has turned the country’s FX market into a liquid desert.

“GSK’s recent exit from Nigeria might not have shocked the Sherlock Holmeses of the business world, but it’s like another spicy topping on the corporate pizza of the “Japa” trend that’s been sizzling in recent years. Picture this: the manufacturing arena, particularly the Fast-Moving Consumer Goods (FMCG) domain, has seen businesses waving goodbye to Nigeria or giving their product lines a pause, most blaming the tough operating scene. Unilever even recently bid adieu to its own home and skincare portfolio. Oh, and Procter and Gamble? They pulled the plug on a whopping $300 million factory extravaganza. Etisalat, Tiger Brands, HSBC, UBS, Mr. Price, Game, it’s like a talent show of exits.”

“Let’s cut to the chase. If you’re in a business and you’re not into tightrope walking, you better start thinking about worst-case scenarios in your business plans. It’s as obvious as spotting a penguin in the Sahara. Cozying up to local production and getting in bed with stakeholders to cut down on import addiction is the way forward. After all, the “ouch” moments are hitting the businesses that can’t get enough of those imported goodies. So, folks, buckle up your business belts and get ready for an interesting ride in the land of Naija,” he added.

Nurudeen Adeyemi, Independent Sales Contractor at Digital Microsystems Pte Ltd, saw the exit of companies in Nigeria from the perspective of leveraging the opportunity for a paradigm shift in the economy. He urged Nigerians to view such from a positive angle to grow their own economy.

“Whenever a foreign company announces its exit from the Nigerian market, Nigerians see it as something that inflicts harm on the economy while whenever a foreign company announces its exit from the Indonesian market, Indonesians see it as an opportunity to alter their business strategy, to expand more quickly and better serve the interests of their customers. However,  if international manufacturing companies are leaving Nigeria, that’s an opportunity to develop our domestic market, which is the responsibility of the government and the private sector,” he said.

Paschal Chukwuemeka, an expert in Data and Software Engineering Management, acknowledged the fact that every environment has its peculiar challenges, but insisted that an unstable economy stifles industries and production. He attributed such factors to be responsible for GlaxoSmithKline’s exit from Nigeria.

“Planning to reduce its African operations and employ a distributor approach, announced in 2018, was a direct consequence of a harsh operating environment, and it was particularly biting for its Nigerian business. They probably hung in there hoping for some magic, being that this is arguably the biggest market for anything in Africa by sheer numbers. The Nigeria withdrawal decision was ultimately caused by ‘increased competition from local companies and imports from India and China’. This is something the government would have tried to avert to encourage manufacturing business brought into their country. This was abundantly obvious in its sales dropping by half compared to this time last year,” he pointed out.

Wale Olawande, a Marketing Strategist at Energera Inc., emphasised the need to minimise exposure to foreign currency movements. He urged the government to take proactive steps to mitigate the impact of the rising hostile business environment to avoid further departure of more companies.

“Truth be told, Nigeria is a big market, one of the biggest in Africa. I strongly opine that if the environment was favourable, they wouldn’t leave. GSK is leaving now, some others have left in the past, more could still leave until we solve key challenges with regards to doing business in Nigeria. Not just the ease of it, but the sincere political will. By the way, some leave for other African countries. It’s a sad loss to be honest. People are “japa-ing”, businesses are “japa-ing” too,” he lamented.

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