The Centre for the Promotion of Private Enterprise (CPPE) has warned that the introduction of the expatriate employment levy (EEL) may trigger reciprocal actions from other countries that may affect Nigerians in diaspora and threaten diaspora remittances, which is more than $20 billion.
The CPPE said over 17 million Nigerians are currently in various countries doing extremely well in education, medicine, health, sports, leadership and politics, finance, science and ICT, transportation, tourism, industry and agribusiness, which are valuable external sector assets.
The Chief Executive Officer, CPPE, Dr Muda Yusuf, said while the investment policy with the dual purpose of promoting the localisation of skills and economic growth is laudable, there are concerns about the unintended consequences.
He said besides the policy, there are extant legislations and regulations with similar objectives, which include the expatriate quota that empowers the Nigeria Immigration Service (NIS) to give approvals to companies for expatriate staff engagement only when there is no local capacity.
According to Yusuf, companies currently pay $2,000 per expatriate yearly, which is an equivalent of about N3 million at the current exchange rate.
He said the new levies ($10,000 for staff and $15,000 for directors) translate to N15 million and N22.5 million respectively.
Yusuf also pointed to the National Content Act in the oil industry, which offers opportunities for indigenous investors to offer services to oil and gas companies, adding that indigenous capacity in the sector has grown remarkably since the enactment of the act.
He also listed the presidential Executive Orders 3 and 5, which directed the ministries, departments and agencies (MDAs) to give the right of refusal to indigenous contractors and service providers for procurement purposes.
Yusuf stressed that the implementation of the regulations has been very weak, affecting the outcomes.
He stressed that the timeline for compliance with the new policy is too short as it gave barely four weeks for companies to comply, which Yusuf said would be very disruptive for their businesses, plans and projections.
Yusuf noted that in a major policy shift, companies needed to be given a minimum of six months.
The CPPE boss warned that if the reciprocity policy is activated in any of Nigeria’s host countries, the effect on the diaspora citizens will be very devastating.
He said some of the companies affected are major investors that have invested billions of dollars and have been in Nigeria for decades.
“This administration, being an investment-friendly regime, should give companies more time. The country needs more direct investors than portfolio investors at this time. But ironically, both foreign direct investors and domestic direct investors would be more negatively impacted than portfolio investors.
“The economy needs more investors in the real economy – oil and gas, manufacturing, infrastructure, mining, ICT and healthcare, which require varying skills and competencies. The truth is that major Federal Direct Investment (FDIs) will typically come with some critical staff to oversee their investments. It is imperative to give some consideration to this class of investors, given the scale of their investments which could be in billions of dollars,” he stressed.
The CPPE also stressed that the challenge of the influx of foreigners, especially the unskilled ones, is more pronounced in some sectors than others, such as construction, distributive trade, hospitality and logistics, which he said the policy should target more.
Yusuf also noted that the policy does not make an exception for Nigeria’s African brothers and neighbours, which is coming at a time when the African Continental Free Trade Area (AfCFTA) is gaining traction.
He warned that this policy could be a major setback for the continental economic integration vision as a lot of Nigerians are in many African countries and may be victims of reciprocal actions by other African countries.
