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Nigeria hurts FDI with Africa’s highest work visa fee

Foreigners working in investment-starved Nigeria pay the highest visa fee of any immigrant worker in top African economies, adding to barriers to Foreign Direct Investment (FDI).

The work visa fee, which is paid annually by foreign nationals working in Nigeria, is $2000 following a 100 percent increase in 2018.

That’s higher than the $777 charged by South Africa for work visas and double the cost of a work permit in Ghana, which is $1,000 per annum.

For Rwanda, to renew a work permit costs an average of $124, that’s less than 20 percent of Nigeria’s visa fee and it is valid for two years.

In Addis Ababa, foreigners pay $1,600 for two years, which is more than double the amount paid in Nigeria for the same number of years.

Egypt meanwhile plans to introduce a multiple-entry visa for five years that will cost $700.

“Foreign investors are having to pay a combined $4,000 as immigration fees annually for their expatriates and their spouses in Nigeria, one of the most expensive in the world,” a source familiar with the matter said.

“The Nigerian government does not want foreign investment. They actually think that foreign investors must come here and have no alternatives,” the source said.

Nigeria has struggled to attract FDI after inflows tumbled in 2016 following the sharp drop in oil prices which triggered acute dollar shortages and the first economic recession in 25 years.

FDI fell to a nine-year low of $468.91 million in 2022, according to official data, with smaller African countries stealing a march on Africa’s most populous nation.

International companies operating in Nigeria complained to BusinessDay on how hard it is for them to get visas for their clients investing in Nigeria.

Read also: Nigeria’s costly work visa fees no barrier to expats

Olumide Ohunayo industry analyst and Director, Research, Zenith Travels told BusinessDay that with the decline in FDI, the government may need to look at reviewing the cost of work permits to attract investors.

Ohunayo said 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 is charging so high for visas, it makes the country less attractive to come to.

However, Sindy Foster, principal managing partner, Avaero Capital Partners, told BusinessDay that the fee is a local content requirement to protect Nigerian jobs.

“Most companies, especially oil companies would bring in experts but Nigerians decided that they wanted Nigerians to be employed in Nigerian companies and so, an expert quota was put in place, which means that when you want to bring in experts to work for you, you have to satisfy the requirements.

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

Read also: China simplifies visa process for Nigerians and others

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

She explained that experts’ 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 a lot of them bring in experts because it is a preference 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 a lot of 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 in a way to make people think twice on whether they need experts,” Foster explained.

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

BusinessDay’s checks show that the Ministry of Interior in 2018 increased the work visa fee from $1,000 to $2,000.

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

Falana’s allegation was contained 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 it was increased to $2,000 in December 2018 when the consultant applied for it.

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

The increase was without a prior warning to foreign nationals and, as such, many of them were reportedly surprised at the banks they had visited to pay for renewals.

Also in December 2018, the ministry and the company reviewed the sharing formula for the collected revenues: 55 per cent to the company, 33 per cent to the federal government, five per cent to the ministry of interior and seven per cent to the Nigeria Immigration Service (NIS).

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