25 C
Thursday, July 18, 2024

767 Manufacturing Companies Shut Down In 2023- MAN

The Manufacturers Association of Nigeria (MAN) has cautioned the federal government against implementing the Expatriates Employment Levy (EEL), expressing concerns that it could lead to more companies facing distress. MAN, through its Director General, Segun Ajayi-Kadir, emphasized that the manufacturing sector, already grappling with a 56% capacity utilization, interest rates exceeding 30%, and a substantial foreign exchange import raw levy, cannot bear an additional burden.

In 2023, 335 manufacturing companies became distressed, with 767 shutting down.

The association highlighted the sector’s inability to absorb such a levy at a time of economic downturn. The existing challenges include a rising inventory of unsold finished products valued at N350 billion.

MAN underscored the potential negative impact of the EEL on foreign direct investments (FDIs) and local investors. The association argued that while the levy aims to promote local employment and enhance forex and non-oil income, it might deter FDIs, discourage domestic investors with foreign partnerships, and hinder critical knowledge transfers for Nigeria’s economic growth.

Expressing further concerns, MAN contended that the EEL contradicts the nation’s international trade agreements, particularly the African Continental Free Trade Area (AfCFTA).

The association called on President Bola Tinubu to halt the implementation of the EEL, asserting that it contradicts international trade agreements and undermines the nation’s commitment to an investment-friendly environment.

Latest news

Related news