Over 700 Manufacturers Shutdown Operations, 335 Became Distressed In 2023 -MAN

The Manufacturers Association of Nigeria (MAN) has urged President Bola Tinubu to stop the implementation of the Expatriate Employment Levy (EEL).

This is as the association decried that 767 manufacturers shut down operations while 335 became distressed in 2023 over economic reforms.

According to MAN’s statement on Tuesday, the exchange rate volatility, rising inflation and other economic challenges have worsened the investment climate, and most companies are struggling to stay afloat.

“The imposition of EEL poses a potential impact on the manufacturing sector and the economy at large.

“This will in turn mark an unwarranted and unprecedented addition to the cost of doing business in Nigeria, especially to manufacturers.

“Inventory of unsold finished products has increased to N350bn and the real growth has dropped to 2.4 per cent.

“The manufacturing sector is already beset with multidimensional challenges. In the year 2023, 335 manufacturing companies became distressed and 767 shut down,” the statement read.

The association noted that the EEL contradicts its international trade agreements and that Nigeria is a signatory to the African Continental Free Trade Area Agreement, (AfCFTA) which seeks to promote the free movement of skilled labour across the continent.

“We are equally worried that the imposition of such a levy could have far-reaching implications for our national economy and potentially exert pressure on our national currency could be introduced through a Handbook, rather than a law enacted by the National Assembly.

This levy, if not reversed, might expose Nigeria to a plethora of lawsuits that would distract the government from the task of salvaging the current dire situation of our economy,” the statement added.

Recommending a solution, MAN said, “We urge the president to direct that the implementation of the Expatriate Employment Levy be discontinued”.

Recall that President Bola Tinubu launched the EEL, a new policy aimed at addressing wage gaps between expatriates and the Nigerian Labour force while encouraging skills transfer and the employment of qualified Nigeriansforeign-owned companies.

The new levy is $10,000 for staff and $15,000 for directors. This represents a significant shift from the $2,000 paid by foreign nationals for the Combined Expatriate Residence Permit and Alien Card.