MAN, LCCI Caution Federal Government on Expatriate Employment Levy

The recent introduction of the Expatriate Employment Levy (EEL) by the Federal Government of Nigeria has sparked caution from the business community, with the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) expressing concern over its potential impact on Foreign Direct Investment (FDI) inflows.

According to the National Bureau of Statistics (NBS), Nigerian nationals constitute only 59% of total jobs in Nigeria, with their wages accounting for less than 45% of total wages.

The average basic salary of expatriates stands at more than 45% above the basic salary of Nigerian nationals.

MAN Director-General Segun Ajayi-Kadir noted that the levy runs contrary to the President’s Renewed Hope Agenda and the kernel of his Fiscal Policy and Tax Reform initiative.

He emphasized that the levy would disincentivize domestic investors and undermine knowledge transfers critical for Nigeria’s economic growth.

LCCI Director-General Dr. Chinyere Almona acknowledged the government’s efforts to boost local employment and skills development but expressed concern about the perception of foreign investors that the Nigerian government is not accommodating to foreign workers.

This perception, she said, could harm the drive for FDI inflows.

The Nigeria Employers Consultative Association of Nigeria (NECA) Director-General Adewale-Smatt Oyerinde also raised concerns about the legality of the EEL and its potential to create socio-economic distortions.

He argued that imposing a levy of between $10,000 and $15,000 on employers that employ expatriates would discourage foreign investment and undermine the government’s fiscal and monetary reforms.

As the debate over the Expatriate Employment Levy continues, it remains to be seen how the Nigerian government will balance the need to promote local employment and skills development with the need to attract and retain foreign investment critical to the country’s economic growth.