According to the Manufacturers Association of Nigeria, 335 enterprises experienced financial difficulties in 2023 while 767 manufacturers ceased operations.
This occurred against a backdrop of worsening investment conditions due to growing inflation, volatile exchange rates, and other economic issues.
This was said by MAN in a statement denouncing the Federal Government’s recently implemented Expatriate Employment Levy.
The levy is in direct opposition to President Bola Tinubu’s Renewed Hope Agenda and the foundation of his Fiscal Policy and Tax Reform effort, the association claimed, leaving it stunned.
The unforeseen negative effects on the manufacturing sector, according to MAN, are enormous and cannot be tolerated at this clearly depressed moment in our economy.
“The imposition of EEL poses a potential impact on the manufacturing sector and the economy at large,” partly reads the statement.
“This will in turn mark an unwarranted and unprecedented addition to the cost of doing business in Nigeria, especially to manufacturers. The manufacturing sector is already beset with multidimensional challenges. In the year 2023, 335 manufacturing companies became distressed and 767 shut down.”
The statement went on to say that the sector’s capacity utilisation has dropped to 56% as a result of growing interest rates and a lack of foreign exchange needed to buy machinery and raw materials.
“Inventory of unsold finished products has increased to N350bn and the real growth has dropped to 2.4 per cent,” it added.
Additionally, MAN expressed worry that the EEL goes against the terms of our international trade agreements.
It was contended that Nigeria is party to the African Continental Free Trade Area agreement, which aims to facilitate the free flow of skilled labor around the continent in conjunction with non-discriminatory policies towards other Africans.
The group voiced concern that the imposition of the charge may lead to reprisals against Nigerians employed in other countries of Africa and the world, impede attempts at regional integration, and paint Nigeria as the victim of her peers.