The newly introduced Expatriate Employment Levy (EEL) of $10,000 and $15,000 for staff and directors, respectively, has sparked controversy in Nigeria, with implications for the manufacturing industry. According to the Manufacturers Association of Nigeria (MAN), 335 manufacturing companies became distressed, and 767 shut down in 2023, raising concerns about the levy’s impact on the sector.
MAN warned that the EEL could undermine President Bola Ahmed Tinubu’s efforts to build confidence among domestic and foreign investors. In a statement issued by MAN’s Director-General, Segun Ajayi-Kadir, the levy was described as punitive and perceived as a punishment for investing in Nigeria and employing foreign nationals.
Ajayi-Kadir emphasized the potential negative consequences of the EEL on the manufacturing sector and the economy at large. He highlighted challenges such as declining capacity utilization, high-interest rates, and increased inventory of unsold finished products. The imposition of the levy, coupled with existing difficulties, could deter investment and hinder economic growth.
Moreover, MAN expressed concerns that the EEL would deter multinational companies from investing in Nigeria and setting up regional headquarters in the country. This could result in a loss of global expertise and hinder knowledge transfer to Nigerians, affecting the country’s technological advancement.
The association also criticized the manner in which the levy was introduced, noting that it was implemented through a handbook rather than a law enacted by the National Assembly. MAN warned that this approach could expose the government to legal challenges and contradict existing laws, such as the Local Content Act and the Immigration Act.
Additionally, MAN raised concerns about the levy’s impact on Nigeria’s international trade agreements, particularly the African Continental Free Trade Area (AfCFTA) agreement. The levy could trigger retaliatory measures against Nigerians working abroad and undermine regional integration efforts.
MAN called on President Tinubu to reconsider the implementation of the EEL and urged the government to prioritize stakeholder consultations before implementing policies with far-reaching implications. The association emphasized the importance of promoting job opportunities for Nigerians while attracting foreign investment and urged the government to focus on human capital development.
In conclusion, MAN underscored the need for a balanced approach that supports economic growth while ensuring the welfare of Nigerian workers and maintaining Nigeria’s position as an attractive investment destination.