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Tobacco, alcohol tariff raise threatens over 20,000 jobs

Tobacco, alcohol tariff raise threatens over 20,000 jobs

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Bimbola Oyesola

Organised Labour, yesterday, warned that over 20,000 jobs may be lost due to the increase in the excise duty on alcoholic beverages and tobacco announced by the Federal Government on Sunday. 

National President of the National Union of Food Beverage and Tobacco Employees (NUFBTE), Lateef Oyelekan, said employers in the industry have notified the union they may have to downsize as the new tariff would impact on the cost of production.

Recall that the Minister of Finance, Mrs. Kemi Adeosun, during the announcement on Sunday, had stated that the new excise duty rates were spread over a three-year period from 2018 to 2020 in order to moderate the impact on prices of the affected products.

But the NUFBTE President said with the new tariff, consumers would have to pay more for cigarettes, alcoholic beverages, which cut across beer and stout, wines and spirits.

He noted that the union has subsequently written the Minister of Labour and Employment, Senator Chris Ngige, on the implications of the new tariff, which may further exacerbate the problem of unemployment in the country.

“This new policy of the government will increase the cost of production and if that happens, the employers would have to look for a way of cutting cost, and workers are always the first option,” he said.

Oyelekan said more than 20,000 workers are presently employed in the alcoholic sector and half of this may lose their jobs, the same applies to the tobacco sector.

The NUFBTE President said the new tariff would not make Nigerian companies competitive with their counterparts outside the country but would further encourage importation instead of local production.

He said, “the British American ‎Tobacco (BAT) has just decided to make Nigeria its African headquarters where all its products for other African countries would be produced, but this may make the company to relocate to any other African country with much more favourable policy.

“We can recall that Dunlop, Mitchellin relocated to Ghana due to unfavourable policy and now produce there and still bring the products to Nigeria because this is where the market is. That means Nigeria is providing employment for foreigners while our people walk on the streets daily looking for jobs. It is sad!”

Oyelekan said what the union expected from the government was for it to look for ways to create jobs for Nigerians and maintain the existing ones with the high insecurity in the land.

He also stated that the drive towards foreign direct investment would be impacted negatively as no investor would ‎like to invest in an economy with low return on investment.

“Our employers have already notified us ‎that it would lead to shut down of some of their companies. What government should be doing is to come up with policy that will discourage employers from downsizing, but before they can do that, tariff has to be reasonable,” he said.

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