Government doubles fee for residence permit

IMPACT – MEDIUM

What is the change? Nigeria has doubled the government fee for the Combined Expatriate Residence Permit and Aliens Card (CERPAC) from US$1,000 to $2,000 per year.

What does the change mean? The CERPAC is required of foreign nationals living and working in Nigeria, and may be issued for up to two years.

• Implementation time frame: Immediate.
• Permits affected: CERPACs.
• Who is affected: Expatriates living and working in Nigeria. Students and missionaries have been excluded from the rate increase.
• Business impact: The sharp increase will raise the costs of hiring and retaining expatriate workers.
• Next steps: The new CERPAC fee of $2,000 must be paid at least annually. Companies intending to obtain two-year validity must pay $4,000 upfront.

Analysis & Comments: The government has generally been making efforts to promote foreign business and direct investment, but this hike in CERPAC fees will increase the costs of doing business and of engaging expatriates to live and work in Nigeria. Further, the increased costs may impair the ability of companies to employ expatriates with the technical expertise required in particular industries. By doubling the cost of CERPACs, the government may intend to reduce the influx of foreign workers into Nigeria by furthering localization policies. The higher cost may encourage employers to hire Nigerian citizens and transfer knowledge and skills from foreign workers to local understudies, who may eventually fill more senior-level positions.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.