Nigeria has instituted a compulsory annual levy for entities engaging expatriate personnel, mandating payments of $15,000 (£12,000) for a director and $10,000 for other employees.
The initiative aims to foster the employment of more Nigerian nationals by foreign corporations. Exempt from this levy are personnel of diplomatic missions and governmental officials.
President Bola Tinubu cautioned against leveraging the levy to deter potential investors. He made these remarks during the unveiling of the Expatriate Employment Levy (EEL) handbook on Tuesday, emphasizing the government’s objective to enhance revenue streams and promote indigenization.
Tinubu underscored the initiative’s goal to rectify wage disparities between expatriates and the domestic labor force while concurrently expanding employment prospects for qualified Nigerians within foreign enterprises operating in the nation.
Citing data from the interior ministry, local media reports indicate an estimated 150,000 expatriates presently residing in Nigeria, predominantly employed in sectors such as oil and gas, construction, telecommunications, and hospitality.
Nigeria ranks among Africa’s principal oil producers, with oil and gas exports constituting approximately 90% of foreign exchange earnings, according to the International Monetary Fund.
Companies in Nigeria currently incur an annual expenditure of $2,000 per foreign employee for residency permits.
This development unfolds against the backdrop of Nigeria grappling with its most severe economic downturn in recent memory, exacerbating widespread economic strain and discontent in recent months.
In response to economic grievances, labor unions and government workers staged demonstrations on Tuesday.
Acknowledging the challenging economic climate, President Tinubu affirmed ongoing efforts to fortify the nation’s financial footing and stimulate economic growth.
The levy applies to employees rendering services for a minimum of 183 days annually and carries penalties of up to three years of fines and up to five years of imprisonment for non-compliance, including the provision of inaccurate information.
The enforcement of the levy falls under the purview of the Nigerian Immigration Service.
Interior Minister Olubunmi Tunji-Oj, as cited by local media, outlined plans for its operation under a public-private partnership framework involving the government, immigration service, and a private entity.
Nigerian economist Abubakar Abdullahi contends that the levy augurs well for the country and is unlikely to deter potential investors, as they share an interest in Nigeria’s growth. He remarked, “I believe Nigeria stands to benefit from this levy as more companies will start looking inwards as there are qualified Nigerians from all sectors.”
