767 Manufacturers Shut Down in 2023 – MAN Raises Alarm

In a recent statement, the Manufacturers Association of Nigeria (MAN) revealed that 767 manufacturing units ceased operations in 2023, with an additional 335 facing distress. This alarming trend is attributed to exchange rate fluctuations, escalating inflation, and broader economic challenges, further deteriorating the investment climate.

MAN strongly criticized the newly introduced Expatriate Employment Levy by the Federal Government, asserting that it contradicts President Bola Tinubu’s Renewed Hope Agenda and the essence of his Fiscal Policy and Tax Reform initiative.

Expressing deep concern, MAN emphasized the severe consequences on the manufacturing sector, already grappling with various challenges. The statement highlighted a decline in sector capacity utilization to 56%, alongside rising interest rates and a shortage of forex for raw material and machinery imports. The inventory of unsold finished products soared to N350bn, and real growth plummeted to 2.4%.

MAN also expressed worry that the Expatriate Employment Levy contradicts international trade agreements, potentially triggering retaliatory measures and hindering regional integration efforts.

In a plea to President Tinubu, MAN urged the discontinuation of the Expatriate Employment Levy, emphasizing its adverse effects on the national economy. The levy, introduced to address wage gaps and encourage local employment, imposes $10,000 for staff and $15,000 for directors, a significant shift from the previous $2,000 fee for foreign nationals.

The policy has faced staunch criticism from Nigeria’s Organised Private Sector, particularly the Lagos Chamber of Commerce and Industry, expressing concerns about potential negative impacts on foreign investments. The Centre for the Promotion of Private Enterprise also criticized the policy, highlighting its potential setback for continental economic integration and the implications for Nigerians in the diaspora.