Nigeria Witnessed The Closure of 767 Manufacturers in 2023 – MAN
According to the Manufacturers Association of Nigeria (MAN), the manufacturing sector faced significant challenges in 2023, with 767 manufacturers ceasing operations and 335 becoming distressed during the year. These setbacks were attributed to factors such as exchange rate volatility, rising inflation, and other economic hurdles that have dampened the investment climate.
In a statement, MAN criticized the Federal Government’s introduction of the Expatriate Employment Levy, expressing disbelief at its imposition. The association argued that the levy contradicts President Bola Tinubu’s Renewed Hope Agenda and the core principles of his Fiscal Policy and Tax Reform initiative.
According to MAN, the unintended negative consequences on the manufacturing sector are humongous and cannot be accommodated at this time of evident downturn in our economy.
The statement read in part, “The imposition of EEL poses a 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. The manufacturing sector is already beset with multidimensional challenges. In the year 2023, 335 manufacturing companies became distressed and 767 shut down.”
The statement further highlighted that capacity utilization in the sector plummeted to 56 percent due to increasing interest rates and a shortage of foreign exchange required to import raw materials and machinery.
Additionally, it noted, “The inventory of unsold finished products has surged to N350 billion, while real growth has dwindled to 2.4 percent.” MAN expressed concern that the Expatriate Employment Levy (EEL) contradicts Nigeria’s international trade agreements and its accompanying obligations.
Arguing that Nigeria is a signatory to the African Continental Free Trade Area agreement, which aims to facilitate the free movement of skilled labor across the continent without discrimination, the association cautioned that the levy’s introduction could provoke retaliatory actions against Nigerian workers abroad. This move may also hinder regional integration efforts and tarnish Nigeria’s image as a cooperative member among its peers.
