Speaking at the session, Dr Richardson Ajayi, BFC Coordinator, lamented that foreign investors are preying on Nigerian businesses and are seeking to push their founders out.
This, according to him, threatens the nation’s dream to build and nurture vibrant private sector businesses capable of competing with global brands and also reduce employment opportunities for the youth.
“The objective of this meeting is to draw the attention of key stakeholders, especially the Government of the Federation and the business community to the plight of Nigerian entrepreneurs who out of “sweat and grit” started their business but at some point in the pursuit of growth, have had to access venture capital funds or foreign investments.
“Our experiences have largely been tales of woe, which have the possibility of stunting the growth of indigenous businesses like ours. We are also hoping that through this coalition, government can enact policies and laws that will correct that apparent lop-sidedness,” Ajayi said.
Ajayi lamented that most local businesses have been struggling due to unfavourable operating environment and lack of access to finance to grow their business, hence they approach foreign investors and venture capitalists to invest in their business.
While he acknowledged that there are many good private equity companies that have accomplished successful private equity transactions, as well as those that understand the challenges of the market and are patient with their local partners, Ajayi noted some others seek controlling rights as a major condition to invest.
He added that some of the investors disregard the provisions of the agreement to wrest control from the founders, thereby hijacking the indigenous owned companies.
“Our intention therefore is to lead the charge in drawing attention to-this unwholesome practice and advocate for a better investment climate for Nigerian entrepreneurs. To checkmate this unwholesome development, the group called on the government to put in place policies that do not allow an investor to have controlling rights in a Nigerian business,” Ajayi said.
Muda Yusuf, Director-General of the Lagos Chambers of Commerce and Industry, said the Nigerian Investment Promotion Commission Act of 1995 needs to be reviewed to protect local business owners. He argued that the legislation in too lax and makes it easy for foreign investors to elbow out business founders.