From $1,000 to $2,000: Nigeria’s Increase in Visa Fee Impacts Foreign Direct Investment
- Foreigners working in Nigeria pay the highest visa fees following an increase from $1000 to $2,000
- This increase has been harming the country's Foreign Direct investment in recent years
- Nigeria continues to struggle to attract FDI with its current forex crisis and other economic problems
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Foreign workers in Nigeria pay the highest visa fee of any immigrant worker in major African nations.
This follows a 100% increase in work visa cost in 2018 for foreign nationals working in Nigeria who must now pay $2000 yearly (from $1,000) to remain in the country.
As a result, BusinessDay reported that this has affected the Foreign Direct Investment (FDI), causing it to worsen over time.
Source: Getty Images
This appears to be taking a toll on the country's FDI, which has continued to slow down in recent years.
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Foreign Direct Investment data released by the National Bureau of Statistics found that 28 states could not attract Foreign Direct Investment in the 1st quarter of 2023.
Nigeria’s Visa cost against others
Nigeria’s visa is more expensive than the $777 South Africa charges for work visas and double the cost of a work permit in Ghana, which is priced at $1,000 annually.
The average cost of a two-year work permit renewal in Rwanda is $124, less than 20% of the cost of a Nigerian visa.
Foreigners pay $1,600 for two years in Addis Ababa, more than twice what they would in Nigeria for the same period.
To save about $700, Egypt plans to commence a multiple-entry visa to last five years.
According to a source who spoke to BusinessDay, foreign investors are required to spend $4,000 annually for immigration costs for their expatriates and their spouses in Nigeria, one of the priciest countries in the world.
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The source claims that Nigeria's government opposes international investment. They genuinely believe that there are no other options and that international investors must come here.
The struggle to attract FDI
Following a steep decrease in oil prices in 2016 that resulted in severe dollar shortages and the country's first economic recession in 25 years, Nigeria has struggled to attract FDI.
According to official data, in 2022, FDI reached a nine-year low of $468.91 million as lesser African countries overtook Nigeria.
Olumide Ohunayo, director of research at Zenith Travels and industry expert, said the government may need to reconsider the price of work permits in order to draw in more foreign direct investment.
He said the government may have opted to raise the fees to improve foreign exchange earnings in Nigeria. Ohunayo, however, said that this is bad for foreign direct investment.
According to him, the country becomes less alluring to visitors when immigration charges such hefty visa fees.
The cost is a local content requirement to safeguard Nigerian jobs, according to Sindy Foster, principal managing partner of Avaero Capital Partners, who told BusinessDay about the obligation.
“Most companies, especially oil companies would bring in expats but Nigerians decided that they wanted Nigerians to be employed in Nigerian companies and so, an expat quota was put in place, which means that when you want to bring in expats to work for you, you have to satisfy the requirements.
He pointed out that due to Nigeria's technical environment, which includes oil and gas, shipping, aviation, and the development of railways, some other nations that may be used to compare the fees imposed in Nigeria certainly don't draw as many ex-pats as Nigeria does.
"Tinubu in India": Nigeria Missing as Egypt, SA, Others Emerge Top African Countries With Biggest FDI
Nigeria is conspicuously missing in the latest release of the top 10 African countries that attracted the most foreign investments in the first half of 2023, Legit.ng reported.
Recent data shows that Africa's largest economy, which devalued its currency to woo foreign investors, is battling investor confidence due to many issues and suffers vast foreign divestments.
The country's recently elected President, Bola Tinubu, is in India to attend the G20 meeting and is expected to market Africa's largest crude oil producer to investors.
Source: Legit.ng
