The Manufacturing Association of Nigeria (MAN) has sounded the alarm on the state of the manufacturing industry, revealing that 767 companies ceased operations while 335 faced distress in 2023.
Headquarters of the Manufacturing Association of Nigeria
This downturn is attributed to various economic hurdles, including exchange rate fluctuations, escalating inflation, and a deteriorating investment climate.
Of particular concern is the introduction of the Expatriate Employment Levy (EEL) by the Federal Government, drawing criticism from MAN. The levy, imposing fees of $10,000 for staff and $15,000 for directors, is deemed a significant hike from the previous $2,000 charge. MAN argues that this levy could further burden manufacturers already grappling with myriad challenges.
Capacity utilization within the sector has plummeted to 56%, compounded by soaring interest rates and a scarcity of foreign exchange for importing crucial raw materials and machinery. Additionally, the sector faces a staggering inventory of unsold finished products valued at N350 billion, coupled with a real growth decline to 2.4%.
MAN voices apprehensions over potential conflicts with international trade agreements, such as the African Continental Free Trade Area, which aims to facilitate the movement of skilled labor across the continent. The association warns of retaliatory measures against Nigerians working abroad, hindering regional integration efforts and tarnishing Nigeria’s global image.
In response to these concerns, MAN urges President Bola Tinubu to reconsider the implementation of the Expatriate Employment Levy, highlighting its adverse effects on the manufacturing sector and the broader economy.
The association advocates for discontinuing the levy to avert further distress within the sector and align with broader goals of economic growth and development in Nigeria.
