CEM REPORT, FINANCE | The Nigerian Federal Government has announced a suspension of it earlier announcement of a new Expatriate Employment Levy (EEL). The announcement has earned the applauds of leading business advocacy groups, the Nigeria Employers’ Consultative Association (NECA) and the Centre for the Promotion of Private Enterprise (CPPE).
Recall that the federal government announced a new EEL which sent shockwaves through the business community. The levy, which would have imposed a $15,000 fee on companies employing expatriates as directors and $10,000 for expatriate staff, was met with swift and fierce opposition, highlighting potential negative consequences for the economy.
Groups applauds EEL suspension
Adewale-Smatt Oyerinde, Director General of NECA, expressed appreciation for the government’s responsiveness. “We acknowledge the government’s desire to address challenges in expatriate employment management,” he stated.
“This is a positive step by the Tinubu administration, demonstrating their willingness to listen to our concerns. However, the EEL raised concerns for businesses regarding its potential impact on investment and economic growth,” he added.
Oyerinde emphasized the importance of open communication and collaboration. “The Tinubu administration’s decision to pause the EEL is a positive step. We urge them to engage in inclusive discussions with the Organized Private Sector of Nigeria (OPSN) to develop sustainable solutions that benefit both the economy and businesses.”
Related: MAN Condemns New Expatriate Employment Levy (EEL)
Strengthening Existing Regulations, Not New Levies
The CPPE echoed NECA’s sentiments. “The suspension of the EEL is a sign of a responsive and inclusive government,” stated Chief Executive Officer Mr. Muda Yusuf. However, Yusuf argued that existing regulations within the framework of the Nigeria Immigration Act and the Expatriate Quota Handbook already addressed the government’s objectives. “Strengthening enforcement mechanisms within the Ministry of Interior and the Immigration Service is a more effective approach,” he suggested.
Yusuf pointed to the presence of expatriates in the retail sector as evidence of regulatory weaknesses. “There’s no shortage of expertise in retail in Nigeria,” he noted. “Yet, we see expatriates operating shops in traditional markets, displacing local traders who simply cannot compete.” Similar concerns were raised regarding competition in sectors like computer and electronics, textiles and fabrics, and fashion accessories.
Finding a Balance
The debate surrounding the EEL highlights the complex issue of balancing the need for skilled expatriate workers with fostering a competitive environment for domestic businesses. While some expatriate expertise is crucial for specific industries, the concern is that an unregulated influx could stifle local businesses and hinder skills transfer.
The path forward likely lies in a collaborative approach. The government can work with the private sector to identify critical skill gaps where expatriate expertise is essential. Simultaneously, efforts should be made to strengthen enforcement of existing regulations and prioritize skills development programs for Nigerian nationals. This will ensure a more balanced and sustainable approach to managing expatriate employment in Nigeria.
