Between expatriate employment levy and manufacturing firms

The recent introduction of the Expatriate Employment Levy on foreign workers in the Nigerian economy and the resultant backlash from the Manufacturers Association of Nigeria (MAN) that led to its suspension elicits some public interest. The levy, which ranged from $10,000 for staff to $15,000 for directors, is considered unnecessary by MAN. This issue deserves further interrogation.

These issues arise given the ongoing expanding trend of globalisation and the implied increased tempo of labour flows with its immigration implications across many jurisdictions. However, with these implied labour and resource flows, every country must protect its economy by whatever means it deems fit to ensure it does not lose out in the global “economic chess game”. Hence, there are many sides to this argument on the imposition of the expatriate employment levy on foreign staff and directors of manufacturing companies within the country.

Further in its argument, MAN asserts that this levy would compound the already existing multidimensional challenges the manufacturing sector is confronted with and should thus be removed, moreover, since it is not emanating from the National Assembly but by a mere circular from the executive arm of government, which may thus attract a plethora of lawsuits that would in the long run not augur well for the economic wellbeing of the country. These issues raised by MAN, though tenable to a reasonable extent to warrant the suspension of the directive, may also have other sides to them.
 
First, the imposition of the Expatriate Employment Levy is not the only problem bedevilling the manufacturing sector of the country. MAN should focus on engaging the government in addressing the already existing multidimensional problems of the sector. These need more urgent attention than the imposition of the Expatriate Employment Levy. Issues of the poor macroeconomic operating environment, insecurity, inadequate power supply and a myriad of other inhibiting factors to well-functional manufacturing activity in the country should be on the front burner for MAN in their engagement with the government.

Though the Expatriate Employment Levy has its shortcomings and setbacks for the sector, as adequately articulated, the implications for production are infinitesimal relative to the aforementioned challenges already bedevilling the manufacturing sector. The issue here is the prioritisation of issues in addressing the challenges of manufacturing in the country. Every foreign investor would be glad to bring in new capital and other resources into an environment where the business climate is conducive and profits can be adequately repatriated in line with local exchange control requirements, irrespective of the imposition of any levy, whether for expatriate employment or other things.
 
The other issue that should concern the manufacturers’ association is whether, in all cases, there are no Nigerians who can perform the tasks these foreign nationals are performing in the sector. Oftentimes, Nigerian experts are sidelined in their own country in preference for foreigners, a practice that is common in multinational companies. That is the kind of issue that should be raised when this Expatriate Employment Levy issue is being discussed. Are there no Nigerians that can do those jobs currently being done by foreigners? This is very critical here.
 
Going forward, the country needs to evaluate the use of foreigners in its economic development. They should be heartily welcome provided they are performing critical roles in the development of the country. The world has become a global village and labour mobility is pervasive across all economies, especially where they are adding value to their host countries.

On the other hand, legislations also abound across many countries on the protection of the interest of the nationals in the granting of certain privileges. Nigeria should strike a balance in the implementation of the Expatriate Employment Levy such that the national economy is not short-changed in this regard.