The Manufacturing Association of Nigeria (MAN) has disclosed a troubling trend within the industry, indicating that a staggering 767 manufacturing companies ceased operations in 2023, with an additional 335 facing distress.

This alarming development underscores the severe economic challenges confronting the manufacturing sector, including exchange rate instability, surging inflation rates, and an overall deterioration in the investment climate.

The adverse conditions have taken a significant toll on manufacturing performance, with capacity utilization plummeting to 56%, accompanied by a substantial inventory of unsold finished products valued at N350 billion.

MAN’s disclosure coincides with its criticism of the Federal Government’s introduction of the Expatriate Employment Levy (EEL), a move deemed counterproductive and potentially exacerbating the plight of manufacturers.

The imposition of the EEL, which levies $10,000 for staff and $15,000 for directors, has sparked widespread concern among industry stakeholders. MAN argues that this steep increase from the previous $2,000 fee for the Combined Expatriate Residence Permit and Alien Card could escalate the cost of doing business in Nigeria, compounding existing challenges.

Furthermore, MAN raises alarms over the EEL’s potential ramifications on Nigeria’s international trade agreements, particularly the African Continental Free Trade Area agreement. The association warns of potential retaliatory measures against Nigerians working abroad and the disruption of regional integration efforts.

In response to these concerns, MAN calls on President Bola Tinubu to reconsider the implementation of the Expatriate Employment Levy, emphasizing its detrimental impact on the manufacturing sector and the broader economy. The association advocates for the discontinuation of the levy to avert further distress within the sector and uphold Nigeria’s commitment to economic growth and development.