Global Mobility Update for Nigeria: Currency Fluctuation and the Introduction of a New Expatriate Employment Levy (EEL)
Currency Update
The Nigerian Naira has lost 81.6% value against the U.S. Dollar since January 2024.
Why is the Naira decreasing?
Nigeria’s foreign reserves reached new lows due to extensive borrowing. The Naira decreased steadily over the last half of 2023 since the government allowed the rate to move more freely. Nigeria received financing from the African Export-Import Bank to help ease access for oil exports and increase the potential of Nigeria’s economy.
The Naira decreased tremendously after the exchange rate methodology was changed and adjusted. This change is a part of a plan to implement currency reform and bring the official exchange rate closer to the black market rate. The Central Bank of Nigeria has increased the benchmark lending rate to 22.75% to stabilize the currency from further depreciating.
What do you need to know about exchange rates as a Global Mobility professional?
For locations with moving currencies, update your COLA more regularly.
Since currency issues and inflation are often intertwined, be sure to update your COLA to capture the impacts of both!
The weakening Naira will impact both your inbound and outbound assignees. The groups will require different strategies to protect their host purchasing power while on assignment.
On February 27, 2024, the Nigerian government introduced the Expatriate Employment Levy (EEL), a mandatory levy imposed on companies employing foreign workers.
Effective March 15, 2024, companies employing foreign workers in Nigeria must pay a mandatory annual levy. This is a flat annual amount of USD 15,000 for directors and USD 10,000 for other expatriate employees. The levy aims to balance employment opportunities for Nigerians and expatriates, close wage gaps between them, and encourage companies to hire locally.
