Increase of excise on alcohol, tobacco will reduce jobs – Union

Organised labour has expressed concern that the increase in the excise duty on alcoholic beverages and tobacco announced by the Federal Government will reduce jobs in the tobacco sector of the economy.

National President of the National Union of Food Beverage and Tobacco Employees (NUFBTE), Lateef Oyelekan, said that over 20,000 jobs in the sector may be lost to the new duty regime

Finance Minister, Kemi Adeosun, announcing the new excise duty rates on Sunday, said it is spread over a three-year period from 2018 to 2020 to moderate the impact on prices of the affected products.

The NUFBTE President said he is worried because with the new tariff, consumers will have to pay more for cigarettes, alcoholic beverages, which cut across beer and stout, wines and spirits.

“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.

The Union, according to Oyelekan, has written to the Minister of Labour and Employment, Senator Chris Ngige, on the implications of the new tariff, which may worsen the problem of unemployment in the country.

The NUFBTE President also explained that the new tariff will not make Nigerian companies competitive with their counterparts outside the country.

Instead, he believes it will further encourage importation instead of local production.

“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,” Oyelekan added.

“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!”

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