…policy introduced without coordination with state govts – ESIPO
Stakeholders in the nation’s ease of doing business space have decried the new expatriate levy introduced by the Federal Government of Nigeria, saying that the new policy, in addition to amounting to a policy somersault, will delay the completion of existing foreign direct investments, which depend on foreign expatriates, and discourage new investment inflows into sub-national governments in the country.
Speaking on Arise TV network Thursday morning, President and Chairman of Council of the Lagos Chamber of Commerce and Industry (LCCI), Gabriel Idahosa, said the Federal Government’s new Expatriate Employment Levy has caused some investors to put their various projects on hold.
The Federal Government had in February rolled out new requirements to be met by expatriates in the country, indicating that a new Expatriate Employment Levy was being computed wherein $15,000 will be the levy for every expatriate on director level, and $10,000 for those on other levels.
“The government already charges $2,000 as a fee for service for issuing the annual card, what is generally known as a green card, a residence card, which is the fee for service the government already charges. The new one is not an increase, which is totally unrelated to that. It is a levy for the fact that you are a foreign person working in Nigeria. It is nothing to do with processing your card for you to work in Nigeria,” Idahosa said.
“For you to work in Nigeria, first you have to get an expatriate quota. Your employer has to pay for an expatriate quota. Then you will get a special visa Subject to Regularisation (STR). Your employer pays for that. And when you arrive in Nigeria, every year, your company pays $2,000 for services rendered to the company,” he said.
Idahosa said the implementation of the new levy would do more harm than good, noting that it has already caused a couple of investors to put a hold on the projects that they have in Nigeria, as they see the new levy as a policy somersault.
“None of those investors know or expect that when they come to invest hundreds of millions of dollars in Nigeria to build a gas processing plant, and they need to bring, let’s say five, 10, 20 employees, none of them have been told that those employees they’re going to be paying $10,000. And these are very important factors in decision making.
“Since the announcement, a couple of investors have, we know because they are our members, put a hold on various projects that are in the pipeline, that we have to see whether we can actually do business in Nigeria going forward,” he said.
When reminded that the new levy was to protect the rights of Nigerian workers from foreign companies, Idahosa said, “If you want to achieve protection of Nigerian workers, across the world, there are various labour laws and regulations that are continuously adjusted, these are not new. There are some African countries that have done several things to address it.
“Within the labour law system, you can actually regulate, end such gaps. It is clear that that is a different matter of how you protect your workers. What you charge an expatriate as a levy has nothing to do with the laws that protect your workers, the industrial laws that ensure that workers are protected, that wage gaps are not there, there are laws that can deal with that certainly. It has nothing to do with what you charge this person. And in any case, to get one expatriate into this country, it will cost you anything between N30 million and N50 million.
“So, it is not fun for the expatriates to be employed by these companies. We don’t see the other side when we have expatriates. So, there are specific solutions to specific issues. The issue of protections of Nigerian workers against exploitation by foreign employers, even domestic employers, there are laws there. The question is, how effectively do we implement them?” he said.
Idahosa noted that the levy could further drive away investment.
“When investors invest, they expect to protect their investment by having some of their top people here as directors, as technical people to manage that investment. These people are part of the cost of that project, and if you want to make the investment attractive, you have to ensure that the cost of bringing those expatriates is affordable all the time,” he said.
Commenting on the same matter, the Director-General and Chief Executive Officer at the LCCI, Dr Chinyere Alumona, said such a move would discourage FDI into the country.
She said the new policy was “not accommodative to foreign workers” and would harm the country’s drive for FDI, calling for a balanced approach to expatriate employment.
Meanwhile, Chief Executive Office of Edo State Investment Promotion Office (ESIPO), Kelvin Uwaibi, said the new expatriate policy was introduced without proper coordination with sub-national governments, noting that such a move would harm states’ drive to attract investments.
“Such a sensitive policy should have been done in coordination with state governments across the country because states invest a lot to attract huge investments, whether through FDI or capital importation,” Uwaibi said.
“The Federal Government would have started with a pilot phase of the levy, maybe with the oil and gas sector. Including the manufacturing sector at this stage is pushing the final cost to the consumers,” he said.
