FG Explores PPP To Generate Revenue For Infrastructure Development From Expatriates Working In Nigeria
Plans are afoot by the federal government to expand its revenue net to drag in expatriates into it as part of a deliberate and conscious effort to raise funds for the development of critical infrastructure projects countrywide.
The revenue system that has been perfected by the Ministry of Interior and the Nigeria Immigration Service (NIS) would be run on a Public Private Partnership basis, according to credible pieces of information from the ministry.
The new revenue system, whose details are still being kept under wraps, is different from the sundry taxes that expatriates working in the country, through the grant of Expatriates Quota, pay to the federal government.
Specifically, the revenue system is expected to leverage the expatriates working population currently at around 50,000 and annual revenue of $617m and grow it to about $1.467 billion by the year 2040, and at a working population of about 81,400, according to official projections.
There are also projections that the revenue system would stimulate higher employment for Nigerian nationals in the private sector by closing the wage gap (cost of labour) between the Expatriates and the Nigerian labour force, thus making it more attractive to hire Nigerians.
An official document said: “Although Nigerian nationals constitute only 59% of total jobs in Nigeria, their wages account for less than 45% of total wages. The main reason for this is the wide wage gap.
“According to NBS, the average basic salary of Expatriates stands at more than 45% above the basic salary. Furthermore, the wage gap between expatriate and Nigerian employees is projected to remain. By 2024, it is expected that the average salary of Expatriates will amount to less than 45% above their basic salary annually.
“This is projected, on average, to increase the earnings of Nigerian nationals and bridge the wage gap to less than 20% between expatriates and nationals. This is expected to bring significant changes in all sectors of the economy and trigger higher nationalization driven by profitability impact.”
The revenue that will be derived from the upcoming system will be drawn from expatriates in all critical sectors including construction, telecommunication, health, oil, and gas, etc., within the provisions of the companies or organizations’ Expatriates Quota and will be channeled into funding infrastructure development projects.
Recall that the former President Muhammadu Buhari had, in 2021, said that Nigeria needed $1.5 trillion in ten years to bridge the nation’s infrastructure gap.
This, according to the immediate past Minister of State for Budget and National Planning, Prince Clem Agba amounted to an outlay of $150 billion annually over a ten-year period to address the nation’s infrastructure deficit.
According to the official document, Ministry of Interior and the Nigeria immigration Service will play significant roles in the measures being finetuned to not only generate more revenue but also to balance out employment opportunities between Nigerian nationals and expatriates in the country.
The Ministry of Interior will be responsible, among others, for providing complete data on quotas issued to all companies and will also be responsible for authorizing the Nigeria Immigration Service (NIS) to provide the data on quota utilization of the companies to ascertain the numbers of expatriates working in Nigeria.
The NIS, under the direct supervision of the Ministry of Interior, as learned, is responsible, among others, for issuing all Nigerian travel documents, including the biometric visa; the issuance of residence permits to foreigners in Nigeria; border surveillance and patrol; and, enforcement of laws and regulations.
The NIS, according to feelers, will, under the emerging revenue-generating arrangement, provide complete data on expatriates working in Nigeria.
It is understood that since the arrangements would largely run on Public Private Partnership, the private component of the project will provide the details of the required data.
“The details will include, but not limited to, information on companies with Expatriate Quotas, the status of occupied quotas, individuals occupying those quotas with their dates of entry in Nigeria, last renewal dates and next renewal due dates,” the official document said.
A source at the Ministry of Interior said that “The PPP synergy will ensure that NIS shares the data of all incoming and outgoing Expatriates with a new Visa and assist with enforcement to ensure compliance.
“Revenues from foreign investment in Nigeria have been payments made to the NIS, and taxes remitted to the Federal Inland Revenue Services (FIRS).
“However, while the law provides for payment of taxes such as the Personal Income Tax Act (PITA) cap P8 LFN, 2007, as amended, which forms the legal basis for taxation of employment income, including those earned by Expatriates working in Nigeria, there is no existing legal framework for the new revenue source that the measures in the works target.
“However, the narrative is expected to change soonest as a new regulatory framework would be unfolded to provide legal and regulatory context.
“The Ministry of Interior and the NIS will lead the way over the legal and regulatory aspect of the significant measures. The principal law governing expatriate employment in Nigeria is the Nigeria Immigration Act, 2015 and Immigration Regulation, 2017.
“Any foreigner who intends to work in Nigeria must obtain the consent of the Comptroller General of immigration. This consent is obtained in the form of an Expatriate Quota by the company or organization, which permits them to employ expatriates to specifically approved jobs and for a specific period with a view to training Nigerians under them and transferring these requisite skills during their period of employment as provided under Section 8 of the Immigration Act.
“The objective of the expatriate quota is to avoid the indiscriminate employment of expatriates in situations where qualified Nigerians can fit into those positions. Expatriate quota is granted for an initial period of three years, renewable for two years subject to a total life span of 7 years, within which such relevant skills ought to have been transferred to qualified Nigerians who were under-studying such expatriates.”
Some stakeholders were confident that the new measures in the works would ensure this was done or else there would be an application of sanctions and enforcement of the same.
This, they contended, would go a long way to stem the tide of brain drain or talents moving out of the country.