• Saturday, June 15, 2024
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BusinessDay

Nigeria’s costly work visa fees no barrier to expats

Foreign expatriates from various sectors of the economy have continued to arrive in Nigeria despite paying one of the world’s most expensive work visa fees and the highest in Africa.

The aviation sector, oil and gas, Maritime and construction companies, amongst others, have continued to attract foreign experts in Nigeria despite requiring a $2,000 fee as a work permit annually, the highest in Africa.

While some stakeholders have argued that the amount is exploitation and would lead to a decline in Foreign Direct Investment (FDIs), others have said it is a local content requirement to protect Nigerian jobs.

Obiora Madu, former President of the Association of Outsourcing Professionals of Nigeria, said the growing number of foreign workers poses economic risks, and other countries are implementing restrictions.

He claimed that the influx of Indian and Chinese companies in Nigeria had rapidly expanded their presence, bringing in relatives and personnel for various tasks.

Olusola Jegede, Managing Partner of Resolution Law Firm and Head of the firm’s immigration practice on blocklists, said that expatriates make up nearly 70 per cent of immigrants in Nigeria and about 20 per cent of foreigners in Nigeria set up businesses here.

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A review of Nigeria’s account data from the Central Bank of Nigeria (CBN) reveals that Nigeria and its corporates spent $55 billion on foreign expatriates for business, professional, and technical services from 2011 to 2021.

This accounted for about 84 per cent of the total business expenses paid abroad during the period, which is the highest cause of capital flight in Nigeria in the review period for any specific item.

Professional and technical fees are charged by individuals or firms specially trained in specific fields of science, technology, and other technical areas. Some of these services include management services, technical and even legal services, to list a few.

Femi Falana, a human rights lawyer, said consultants hired by the Ministry of Interior some years ago are extorting foreigners resident in the country.

Falana’s allegation was in a letter he addressed to Zainab Ahmed, former finance minister.

The lawyer said the Combined Expatriate Residence Permit and Alien Card (CERPAC) fee was $1,000 per annum but increased to $2,000 in December 2018 when the consultant applied for it “within two.”

While noting that Nigeria charges the highest CERPAC fees in “the world”, he said the increase is not captured in the 2018 budget.

Sindy Foster, principal managing partner of Avaero Capital Partners, told BusinessDay that the fee is not a deterrent to foreign investment but a local content requirement to protect Nigerian jobs.

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“This is not an anti-foreign investment regulation. Most companies, especially oil companies, would bring in experts. Still, Nigerians decided that they wanted Nigerians to be employed in Nigerian companies, so an expert quota was put in place, meaning that when you want to bring in expats to work for you, you must satisfy the requirements.

“Originally, the visa was about $1,000 and at the time I was in Nigeria, it was increased to $2,000 yearly. Some of the other countries that they may be looking at as a comparison to the fees charged in Nigeria probably do not attract as many expatriates as Nigeria does because of Nigeria’s type of technical environments such as railways development, construction, shipping, aviation and oil and gas,” Foster said.

According to her, Nigeria has historically attracted a lot of expatriates, and the government felt it was not receiving enough money for the amount of expats it had.

She explained that expats’ salaries are high, and even when they increased the visa fees, it didn’t stop companies from bringing in experts.

“We have Indian companies that do not want Nigerians employed, and so many of them bring in experts because they prefer to bring in somebody who they feel is highly skilled and professional, working at whatever level they want.

“So, they use that as an excuse to bring them. In aviation, there was a time when many people with private jets would hire expert pilots because they didn’t want a Nigerian flying. So, all of these reasons are why the Nigerian government decided to increase the cost of the visa to make people think twice on whether they need an expert,” Foster explained.

She said expatriates want to work in Nigeria despite what everyone says, and those who work in Nigeria often don’t want to go again. “It is a supply-demand thing. The more the demand, the more the vis cost is likely to be,” she added.

BusinessDay’e findings show that South Africa’s General Work Visa costs R 11 500.00 to R 15 000.00. Intra-Company Visas cost R 11,500.00 to R 15,000.00. R 15,000.00 amounts to N615,000 in Nigerian currency.

For Rwanda, renewing a work permit costs an average of 150,000 Frw, and this is valid for two years. This is equivalent to N96,154.

Read also Australia tightens rules on worker visas as unemployment rises

In Ghana, the cost of a work permit for companies is ($1,000) equivalent to N994,000, using the black market rate.

For Addis Ababa, a fee of $1600 is issued to employed foreigners, which is generally valid for two years. This amounts to N1.59 million.

Egypt plans to introduce a multiple-entry visa for five years, which costs 700 US dollars (21,000 Egyptian pounds). This cost about about N696,000.

Olumide Ohunayo, industry analyst and Director of research at Zenith Travels told BusinessDay that the government may have decided to increase the fees to generate more foreign exchange in Nigeria, but this is not good for foreign direct investment.

He said that when immigration charges are so high for visas, it makes the country less attractive.

He said foreign expatriates also help boost the economy because they also spend.

Seyi Adewale, the chief executive officer of Mainstream Cargo Limited, argued that Nigeria’s immigration fees will not discourage any genuine investors.

Adewale said this is based on the type or kind of investors Nigeria wants to attract into its economy.

“For example, we want severe and genuine investors in the Mining sector. This is not a cheap or easy business to set up, and this requires huge capital and the immigration fees are nothing that would hamper or limit these kinds of investors.

“Also, these fees should not be an issue in Technology-Based industries, sectors, systems or companies. What we should limit include investors that come into competition with our local manufacturers, artisans, or businesses,” he said.

Adewale explained that expatriates are only approved and required to work in Nigeria, where no citizens have the requisite skills, talent or knowledge.

He said even at that; there are time limits to their continuous revisions because they are required to transfer knowledge or skill within a specific time frame.

“We should also note that other than fee, the number of these expatriates per institution or company is also essential to limit for the same reasons adduced.

“However, where large capital has been injected, there should be a guaranteed minimum number of expatriates to oversee their investments at a minimal scope,” he added.