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Nigeria Imposes New Expatriate Levy

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Expertriate levy, EEL

CEM REPORT, MIGRATION | Nigeria has introduced a new mandatory annual expatriate levy for organizations employing expatriate workers, aiming to encourage the development of local talent and improve employment opportunities for Nigerians. This move comes at a time when the country is grappling with economic challenges and seeking to foster sustainable growth.

President Bola Tinubu, while launching the initiative, emphasized the dual objectives of the EEL: “The goal is to close wage gaps between expatriates and the Nigerian labour force while increasing employment opportunities for qualified Nigerians in foreign companies in the country.”

The policy, however, has raised concerns about its potential impact on foreign investment. President Tinubu addressed these concerns, stating, “The scheme should not be used as an impediment nor as a stick wielded to deter foreign investors.”

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Enforcement and Potential Impacts of the Expatriate Levy:

The EEL applies to employees working in Nigeria for at least 183 days per year. Non-compliance with the levy can result in hefty fines of up to three years’ worth of the levy and imprisonment for individuals and organizations, including those failing to provide accurate information. The Nigerian Immigration Service, in partnership with the government and a private firm, will be responsible for enforcing the program.

Expert Opinions and Looking Forward:

Economist Abubakar Abdullahi believes the EEL will benefit the nation, stating, “I believe Nigeria stands to benefit from this levy as more companies will start looking inwards as there are qualified Nigerians from all sectors.” However, the long-term impact of the policy on foreign investment and overall economic growth remains to be seen.

The introduction of the EEL marks a significant step for Nigeria in its quest for self-reliance and fostering local talent. As the policy unfolds, it will be crucial to monitor its effectiveness in creating employment opportunities for Nigerians while ensuring it maintains a welcoming environment for foreign investment, fostering a sustainable path for the nation’s future.

The State of Nigeria’s Workforce and Economy:

Nigeria, Africa’s largest economy, boasts a population exceeding 200 million. Despite this large workforce, the country faces challenges in addressing unemployment and fostering economic development. According to local media reports citing data from the interior ministry, over 150,000 expatriates work in Nigeria, primarily in sectors like oil and gas, construction, telecommunications, and hospitality.

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The country is currently experiencing its worst economic crisis in decades, marked by widespread hardship and growing public discontent. This context likely fuels the government’s desire to promote job creation for its citizens.

What is the Expatriate Employment Levy (EEL)?

The EEL requires companies to pay an annual fee for employing expatriates. The fee varies depending on the position: $15,000 for directors and $10,000 for other employees. This policy aims to incentivize companies to prioritize hiring qualified Nigerians, while simultaneously generating revenue for the government.

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