In recent times, much has not been heard about Nigeria’s introduced policy aimed at tightening the cost and regulation of employing non-Nigerian staff, the Expatriate Employment Levy (EEL). On February 27, 2024, President Bola Tinubu formally launched the EEL Handbook and announced that employers of expatriates would pay $15,000 yearly for each foreign director and $10,000 for each other expatriate who stays in Nigeria for at least 183 days in a year.
The reason was threefold: to raise revenue, push for greater employment of Nigerians, and prompt knowledge and skills transfer from foreign technical personnel to local workers.
Since its announcement, the EEL has provoked strong reaction from Nigeria’s business community, foreign investors, employers’ groups and trade associations.
However, and currently, the EEL remains in a suspended state. After widespread pushback, the implementation was temporarily paused by the Federal Ministry of Interior on March 8, 2024, to allow further consultations with stakeholders.
The Lagos Chamber of Commerce and Industry (LCCI) and the Nigeria Employers’ Consultative Association (NECA) have flagged serious concerns about the levy’s timing, scale and impact.
Among the concerns raised was that the levy was announced with a very short lead time (companies had from mid-March to mid-April to comply) in a business environment already under stress.
Employers say expatriates are frequently hired only for niche, highly technical roles that cannot be manned easily locally, and instead of penalising that arrangement, the policy may simply discourage investment or delay projects.
The perception is that Nigeria is sending a signal that foreign workers (by extension, foreign investors) are not welcome or will face added cost burdens. The LCCI warned that this may damage Nigeria’s foreign direct investment (FDI) ambition.
There is also concern that without proper exemptions, the levy could contravene international trade/regional integration commitments (e.g., within the AfCFTA) by treating foreign nationals as second-class, even if they come from other African nations.
“Before resuming full implementation, the government (via the Ministry of Interior and Industry/Trade) should weigh the impact of the levy on FDI flows, sector-by-sector workforce structures, project timelines and fiscal revenue.”
LCCI president, Gabriel Idahosa, noted then, “A couple of investors … have put on hold various projects that they have in Nigeria” precisely because the added expatriate cost was not factored into their original plans.
If fully implemented in its original form, the EEL could have had multiple consequences on investments. The added cost per expatriate means higher project cost, especially in sectors like oil and gas, infrastructure, and manufacturing, where foreign technical staff are still heavily used. In a nation struggling to attract higher FDI, this could be counterproductive.
Another implication is that some investors may slow or suspend projects while they evaluate the impact of the levy on their cost base, which slows job creation, delays tech transfer, and weakens multiplier effects in the economy.
Beyond the cost, the policy sends a message about the regulatory environment and predictability. If companies see Nigeria as having unpredictable labour/investment policy dynamics, they may redirect capital elsewhere.
While the intention is to encourage local employment and skills transfer, without complementary measures (training, capacity building, and robust enforcement of local-content laws), firms may respond by hiring fewer expatriates but also slowing operations, rather than accelerating Nigerian staffing.
As some analysts have pointed out, excluding African-nation expatriates or applying blanket charges regardless of skill or duration may provoke reciprocal treatment of Nigerian expatriates abroad, undermining regional mobility and integration.
That said, there is merit in the underlying goal: Nigeria must steadily reduce dependence on imported skills, better empower its domestic workforce, and ensure foreign labour adds value rather than simply extracting premium wages. The challenge lies in implementation, sequencing, calibration and stakeholder engagement.
Given the current pause and stakeholder engagement phase, Nigeria has an opportunity to recalibrate the EEL so that the policy objectives align with investment-attraction goals, not oppose them. We therefore will recommend conducting a full cost-benefit analysis. Before resuming full implementation, the government (via the Ministry of Interior and Industry/Trade) should weigh the impact of the levy on FDI flows, sector-by-sector workforce structures, project timelines and fiscal revenue.
We also suggest that rather than a blanket levy, you consider phasing in higher payments over time and exempting sectors where expatriate staffing is critical (e.g., specialised infrastructure, emerging tech) or where Nigeria faces acute local skill shortages.
Also, for each expatriate employed, firms could be required to establish a local understudy/mentoring plan, and the levy could be reduced (or waived) if firms demonstrate measurable local-staff development outcomes. As many firms point to confusion about rules (e.g., the 183-day stay threshold and which employees qualify), a clearer online portal, reasonable lead time, and transparent rules will ease anxieties.
Moreover, the government should make clear that Nigeria remains open to foreign investment, and this policy is designed to complement investment and not to penalise it. The narrative must shift from ‘levy on foreigners’ to ‘investment-plus-skills-transfer package’.
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Moreover, once implemented, monitoring the impact on FDI, project timelines, expatriate usage, and domestic staffing levels will allow the government to fine-tune the policy. If significant project freezes or cancellations occur, quick adjustment will preserve investor confidence.
As we know, Nigeria is at a delicate stage. The EEL may be a well-intentioned policy, but the current environment calls for greater care, calibration and stakeholder alignment. With global investors more mobile than ever and the competition for capital intense, Nigeria cannot afford to implement policies that inadvertently punish the very investment it seeks. Instead, it should reshuffle the approach to ensure the EEL becomes an enabler, driving local capacity building and skills transfer while remaining investor-friendly.
Done well, the levy could help Nigeria transition from a nation that simply uses expatriates to one that uses them strategically – bringing them only when absolutely necessary, pairing them with Nigerians who step up, and ensuring that investments build local capability along the way. But for now, with the policy suspended and consultations still underway, Nigeria has the chance to get the approach right.
