Adewale-Smatt Oyerinde: Nigeria’s Regulatory Environment Hurting Businesses

The recent celebration of Workers’ Day once again brought labour issues to the fore. Director General of Nigeria Employers Consultative Association, Mr. Adewale-Smatt Oyerinde, speaks on nagging issues in Nigeria’s industrial relations system. Dike Onwuamaeze brings the excerpts:

We have just celebrated the Workers’ Day on May 1st. What is your overview of the Nigerian industrial relations system?

The Nigerian Industrial Relations System (IRS) is fundamentally structured on a tripartite framework involving government, employers, and organised labour, each playing clearly defined and interdependent roles. However, as of April 24, 2026, the system is under acute tension, with nationwide protests planned for May Day 2026 over non-implementation of the N70,000 Minimum Wage in states such as Adamawa, Zamfara, and Imo, reflecting growing strain within the framework. The system is underpinned by key legislative instruments such as the Labour Act, the Trade Disputes Act, and other enabling regulations, which collectively provide the legal basis for employment relations, dispute resolution, and the protection of rights and obligations within the workplace. At its core, the IRS is designed to promote industrial harmony through social dialogue, collective bargaining, and institutionalised dispute resolution mechanisms. In principle, the framework is robust and aligns with international labour standards. However, inflation at 33.2 per cent as of March 2026 continues to exert pressure on both employers and workers, constraining the system’s effectiveness.

The country’s industrial relation system is currently dominated by frequent and disruptive conflicts, particularly in essential sectors. What are the implications of this trend on the economy and investment outlook?

The increasing frequency of industrial conflicts in Nigeria is a matter of serious concern. From an economic standpoint, such disruptions lead to significant productivity losses and increased costs. This is further compounded by macroeconomic pressures, as Nigeria’s 2026 growth forecast has been downgraded to 4.1 per cent, reflecting weakening economic performance. In addition, capital spending declined from 1.3 per cent of GDP in 2024 to 1.0 per cent in 2025, while debt service consumes 49.5 per cent of government revenue, limiting fiscal space for infrastructure and investment. From an investment perspective, these dynamics reinforce uncertainty, discourage long-term commitments, and weaken Nigeria’s competitiveness.

Is there any need to have a clear legal definition of essential services and their behaviour during national crises?

Absolutely! The absence of a clear and universally accepted legal definition of essential services creates ambiguity and often leads to disputes during industrial actions. Establishing a precise definition, in line with international best practices, is critical to ensuring clarity and consistency in application. Beyond definition, there is also a need to outline acceptable conduct and minimum service requirements during industrial actions, particularly in times of national emergencies—whether economic, social, or political. This will help balance the fundamental rights of workers, including the right to strike, with the need to safeguard public welfare and national security. Such clarity will reduce conflicts, enhance predictability, and strengthen the credibility of the industrial relations system, while ensuring that essential services remain operational even during periods of dispute.

There is a visible trend among social partners to bypass statutory dispute resolution processes. What are the implications of this?

The growing tendency to disregard or bypass established dispute resolution mechanisms is deeply concerning. These processes were instituted to provide structured, fair, and orderly means of resolving disputes without resorting to disruptive actions. When these mechanisms are ignored, it weakens institutional integrity, erodes trust among stakeholders, and encourages a culture of impunity. Disputes that could have been resolved amicably through dialogue and mediation often escalate into prolonged industrial actions with significant economic consequences. For businesses, this creates uncertainty and increases operational risks. For the broader economy, it results in lost productivity, reduced investor confidence, and reputational damage. Strengthening compliance with dispute resolution processes is, therefore, essential to restoring order and ensuring sustainable industrial harmony. Part of our efforts at reversing these trends is the institutionalisation of the International Labour Adjudication and Arbitration Forum, which had witnessed the participation of the ILO Director-General, President of the Appeal Court of Nigeria, President of the National Industrial Court of Nigeria and many other dignitaries. The need for continuous education cannot be overemphasised.

What are the factors hindering the review and passage of Labour and Employment Bills into law?

The delay in reviewing and passing critical labour and employment legislations can be attributed to several interrelated factors. These include bureaucratic inertia, competing legislative priorities, and, importantly, divergent stakeholder interests that often slow down consensus-building. In the case of the current situation, there is a consensus between stakeholders, the delay can be attributed more to lack of political will from the Ministry of Labour and legislative inaction. There is also the complexity of aligning proposed laws with evolving global labour standards while ensuring they remain relevant to Nigeria’s socio-economic realities. Concerns about the potential impact of certain provisions on business sustainability and job creation also contribute to the cautious approach taken by policymakers. To address these challenges, there must be a more deliberate and coordinated effort among stakeholders, including government, employers, and labour, to prioritise these reforms. Accelerating the legislative process while ensuring inclusivity and balance is critical to modernising Nigeria’s labour framework. As at this month (April 2026), no major labour bill has been passed since the Minimum Wage Act of 2024, highlighting the extent of legislative stagnation.

What is NECA’s view on the recently released industrial policy by the federal government?

NECA recognises and commends the federal government’s efforts in articulating an industrial policy aimed at driving economic growth, promoting local production, and enhancing job creation. These objectives are commendable and align with the broader goal of economic diversification.

 However, the true measure of success lies in effective implementation. There must be policy consistency, clarity in execution, and alignment with the realities of the private sector. Critical issues such as infrastructure deficits, access to finance, regulatory bottlenecks, and foreign exchange constraints must be addressed to ensure the policy delivers tangible outcomes. Furthermore, continuous engagement with the organised private sector is essential to refine implementation strategies and ensure that the policy fosters competitiveness, innovation, and ease of doing business.

The crisis in the Middle East has disrupted global supply chains. What are the implications for the Nigerian economy?

The ongoing geopolitical tensions in the Middle East have significant implications. For Nigeria, the impact is already evident: petrol prices rose from N830/litre in February to about N1,325/litre by late March, while diesel climbed above 1,550. Additionally, global shipping disruptions saw traffic through the Strait of Hormuz drop from 135 vessels to just four per day, significantly affecting supply chains. From a macroeconomic perspective, an oil price increase to $80 per barrel (about 31.1% above pre-conflict levels) could add approximately 3.1 percentage points to inflation, further intensifying economic pressures.

 What is NECA’s view on the country’s regulatory environment?

The regulatory environment in Nigeria remains a significant concern for the business community. While regulation is necessary to ensure compliance and maintain standards, the current landscape is characterized by multiplicity of agencies, overlapping mandates, and, in some cases, inconsistent enforcement practices. These challenges create inefficiencies, increase the cost of compliance, and complicate business operations. For Nigeria to improve its ease of doing business, there must be a concerted effort to streamline regulatory processes, eliminate redundancies and enhance coordination among agencies. A transparent, predictable, and business-friendly regulatory framework is essential for attracting investment and supporting enterprise growth. We will however commend the work and support of PEBEC and the Director-General for all the efforts to sanitise the regulatory environment.

Are some regulatory agencies behaving as “undertakers of private enterprises?”

There is a growing perception within the private sector that certain regulatory practices are overly aggressive and, at times, counterproductive. While enforcement is an essential function of regulation, it must be carried out in a manner that supports, rather than stifles, business sustainability. Regulatory agencies should act as partners in development, providing guidance and support to ensure compliance while enabling businesses to thrive. A shift towards a more collaborative and facilitative approach will go a long way in fostering a conducive business environment. For instance, policy actions in certain sectors have raised concerns about large-scale employment risks, with estimates suggesting potential job losses of up to 5.5 million across affected value chains in extreme cases.

The government reports revenue growth but is borrowing and struggling to implement its capital expenditure. What is your perspective on this?

The apparent disconnect between increased public revenue and continued borrowing raises important questions about fiscal management and expenditure efficiency. It suggests that while revenue generation may be improving, there are challenges in revenue allocation, budget execution, and prioritisation. For context, the 2026 budget stands at ₦68.32 trillion, with ₦15.8 trillion allocated to debt service, ₦15.4 trillion to recurrent expenditure, and ₦32.2 trillion to capital expenditure. However, despite capital allocations accounting for roughly 50 per cent on paper, implementation has remained weak, with the 2025 capital budget extended from March 31 to June 30, 2026, indicating persistent execution challenges. Addressing this issue requires stronger fiscal discipline, enhanced transparency, and a strategic focus on channelling resources towards productive investments. Improving budget implementation processes and ensuring value for money in public spending are essential steps towards achieving sustainable and inclusive economic growth.