If you read AO Lawal’s Economics textbook for secondary school students, you would not have seen “Knowledge” as a factor of production. It was not that Mr Lawal did not get the memo, what happened was that when he wrote his books, knowledge had not assumed a huge positioning in the market system.
Fast-forward to this era, we are not just discussing knowledge within the context of factors of production, but as an economic anchor of itself; yes, knowledge-based economies where knowledge is supreme among all the other factors of production like land, capital, entrepreneur and workers. Fascinatingly, knowledge drives national competitiveness at scale.
So, when Nigeria wanted to monetize “Knowledge” via the Expatriate Employment Levy, not via its application, but its transaction, I noted that it was a bad policy. Good enough, the government has flipped and muted that policy:
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“The Federal Government of Nigeria has opted to suspend the implementation of the Expatriate Employment Levy (EEL) following intense deliberations with key stakeholders…EEL is a mandatory annual levy targeting organizations employing expatriate workers. Under this new regulation, companies are required to pay $15,000 for directors and $10,000 for other expatriate employees.”
Sure, I get it: you want to protect local jobs and also make money from these expatriates. But what happens if the companies cannot even afford them, considering that you are already taxing whatever they’re coming to do in Nigeria? I have argued here that Nigeria needs more knowledge and technology transfer, and we must invest efforts to make that happen.
How would that happen? More Google Design Centers and Microsoft Labs instead of sales offices in Nigeria. If we decide to tax those knowledge workers, and not just their outputs, many of these firms will not make Nigeria a destination for its best.
So, we must NOT just suspend EEL, we need to discard it.
If you read AO Lawal’s Economics textbook for secondary school students, you would not have seen “Knowledge” as a factor of production. It was not that Mr Lawal did not get the memo, what happened was that when he wrote his books, knowledge had not assumed a huge positioning in… pic.twitter.com/Xok3SkOmIO
— Ndubuisi Ekekwe (@ndekekwe) March 9, 2024
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When you see everything from the lenses of how much more money you can extract, this is what happens. It’s what extractive mindset breeds. Yea, someone sat down and conjured that levying expatriates will increase employment of the locals and at the same time attract more multinationals. We only think one side, and not the boomerang effects. Capitalism is known for maximizing profit, why would a capitalist take money to where cost of production is higher? Nigerian policymakers and managers haven’t told us.
Framing it as though it would protect local employment is just a fake cover, the target is the money and accompanying bribes; ordinary Nigerians have never been a priority for a Nigerian politician. Enough of the gimmicks. You first move, and you are reminded that it’s a bad move, then you flip again. What exactly was the intent and for how long will these flip-flops continue?
The general belief is that when you are in a hole and wish to come out, the first thing is to stop digging, but in Nigeria, the opposite is always the case. Why is crude oil production failing? Because there’s no enough investment, but we are looking for more people to send away, and then start crying about hard times. Strange people.