NLC Rejects 500% Hike In Excise Duty For Alcohol, Spirits, Others

Comrade Ayuba Wabba, NLC President
Comrade Ayuba Wabba, NLC President

Nigeria Labour Congress, NLC, has petitioned Mrs Kemi Adeosun, the Minister of Finance, and rejected the recent 500 per cent increase in tariff on locally produced alcohol, spirits and tobacco, saying it will lead to massive job loss.

This came as the National Union of Food Beverage and Tobacco Employees, NUFBTE, said the 500 per cent hike in excise duty of these products had placed no fewer than 200,000 jobs in the sector under threat.

NLC in the petition copied Chief of Staff to President Muhammadu Buhari and Director General of Department of State Services, DSS, warned that besides the looming job losses occasioned by the hike, many of the affected companies might decide to relocate to other friendlier neighbouring countries, citing Dunlop and Michelin as examples.

In the petition by its President, Comrade Ayuba Wabba, NLC said, “This astronomical increase in tariff will lead to the following effects, according to industry key players: The policy would lead to huge price disparity between locally produced alcohol, tobacco and spirit and the ones produced outside Nigeria or imported.

”It will also increase the cost of production and reduce profit margin. It will also lead to the closure and possible relocation of those industries to neighbouring countries within West Africa.

“We also wish to draw the attention of the Minister to the threat that the current hike in tariff on locally produced alcohol and tobacco poses to Nigeria’s position as the choice investment destination in the food and tobacco industry in Africa.

”Currently, the British American Tobacco Company, BATC, has its largest manufacturing concerns in Nigeria and actually services other markets in the sub-region from Nigeria. ”The leadership of our union in the sector, NUFBTE, has been informed by manufacturers in the sector that they are seriously considering moving their businesses elsewhere if government goes ahead with the current hike in tariffs.

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”The BATC, which retains its highest manufacturing presence in Nigeria, is seriously considering moving out a significant portion of its production lines out of Nigeria to other African countries.

”Also, many distiller companies, and Guinness Breweries which invested billions in distilling have decided to divert investments running into billions of naira to other neighbouring African countries.

“The massive job losses and social backlashes occasioned by the pull out of Michelin and Dunlop manufacturing companies from Nigeria to Ghana and other neighbouring African countries was a result of unfriendly policies and harsh business environment which we cannot quickly forget.

”We must do everything possible to prevent a recurrence. Currently, the food and beverages sector employs more than two million workers with not less than 40 million dependents.

”We are concerned that if the government continues with this policy, millions of Nigerian families would lose their source of livelihood. The multiplier effect of such scale of job losses and despondency is better imagined than experienced.

“The Federal Government of Nigeria should quickly put in motion a procedure to meet and dialogue with key players in the industry to find the best balance, suspend the implementation of the policy, however, laudable it is, to prevent the negative impact it will have on the economy, workers and Nigerians until after a proper consultation with key industry players.

”We recommend that the proposed high tariff should actually only apply to imported spirits, tobacco and alcohol to protect our local market and jobs.

”The Federal Government should consider embarking on actions that will encourage and relieve the concerned manufacturing companies with incentives and tax waivers that will rather stimulate the sustainability of the affected companies instead of introducing policies that will further constitute obstacles and distraction to their profitable operation.”

Meanwhile, NUFBTE has pleaded with the Minister of Labour and Employment, to implore President Buhari, to reverse the hike, lamenting that over 200,000 workers might lose their jobs to the hike.

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The leaders of the union made the plea during a Save Our Soul, SOS, mission to the Minister.

Leader of the delegation and the Acting General Secretary of the union, Comrade Mike Olarenwaju, while cataloguing the plight of the union, said the 500 per cent tariff increase by the Ministry of Finance on their products was counter-productive as the measure would lead to the collapse of the sector.

“It will kill investments, it is already creating palpable fear in the operators, job losses are looming, while imported products will displace local goods for reasons of smuggling and cheapness,” he said.