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By Merit Ibe, Lagos
The Manufacturers Association of Nigeria (MAN) has said 767 shut down in 2023, while 335 manufacturing firms became distressed as a result of the multidimensional challenges confronting the sector.
Director General of the association made this known yesterday while expressing concern over the Expatriate Expansion Levy (EEL) introduced by the federal government
He lamented the unintended negative consequences of the levy on the manufacturing sector, which he said cannot be accommodated at this time of evident downturn in our economy.
“As major investors and employers in Nigeria, manufacturers believe that, while the levy is ostensibly primed to promote local employment, improve forex and non-oil income earnings, the levy will regrettably deter foreign direct investments, disincentives domestic investors who have partnership with foreign investors and undermine knowledge transfers that are critical for Nigeria’s economic growth.”
He decried the imposition of EEL, which poses potential impact on the manufacturing sector and the economy at large.
“This will in turn mark an unwarranted and unprecedented addition to the cost of doing business in Nigeria, especially to manufacturers.
“In year 2023, 335 manufacturing companies became distressed and 767 shut down. The capacity utilisation in the sector has declined to 56%; interest rate is effectively above 30%; foreign exchange to import raw materials and production machine inventory of unsold finished products has increased to N350 billion and the real growth has dropped to 2.4%.”
The DG said the manufacturing sector is already beset with multidimensional challenges and the new levy will worsen the sector’s woes.
