The Manufacturers Association of Nigeria (MAN) revealed in a recent statement that 767 manufacturers ceased operations, while 335 became distressed in 2023.
These closures and distresses were attributed to various economic challenges including exchange rate volatility and rising inflation, which have exacerbated the investment climate.
MAN strongly condemned the introduction of the Expatriate Employment Levy by the Federal Government, stating that it contradicts President Bola Tinubu’s Renewed Hope Agenda and his Fiscal Policy and Tax Reform initiative.
The association emphasized that the levy would significantly increase the cost of doing business in Nigeria, particularly for manufacturers who are already grappling with numerous challenges.
The statement highlighted the decline in capacity utilization to 56 percent, coupled with rising interest rates and forex scarcity hindering the importation of raw materials and machinery.
Additionally, the inventory of unsold finished products has surged to N350 billion, while real growth has plummeted to 2.4 percent.
MAN expressed concerns that the EEL could trigger retaliatory measures against Nigerians working abroad, potentially disrupting regional integration efforts and tarnishing Nigeria’s image on the international stage.
The association urged President Bola Tinubu to discontinue the implementation of the Expatriate Employment Levy, emphasizing its detrimental impact on the economy and international trade agreements.
The Expatriate Employment Levy, introduced by the Federal Government, aims to bridge wage gaps between expatriates and Nigerian workers while promoting skills transfer and the employment of qualified Nigerians in foreign-owned companies.
However, this policy has faced criticism from Nigeria’s Organised Private Sector, particularly regarding its potential negative effects on Foreign Direct Investments.
The Lagos Chamber of Commerce and Industry expressed concerns about the perception of Nigeria as unwelcoming to foreign workers, which could deter foreign investments. Similarly, the Centre for the Promotion of Private Enterprise criticized the policy, warning of its repercussions on diaspora Nigerians and continental economic integration efforts.
The implementation of the Expatriate Employment Levy has sparked widespread debate and raised apprehensions about its implications on Nigeria’s economic prospects and international relations.
