Applicants at a job recruitment exercise

Within the last one year of President Muhammadu Buhari administration, the Nigerian economy, Africa’s biggest economy, had experienced some difficult times. Companies have resorted to retrenchment in order to stay afloat. But government is not living things to chances, writes Paul Obi

One of the promises of the All Progressives Congress (APC) with President Muhammadu Buhari as the then flag bearer was the pledge to create more jobs for the teeming unemployed population in the country. Being the cardinal point of the administration, it is not a surprise therefore, that much focus had been given to government’s quest to provide jobs. Yet, with these assurances, citizens who had hoped for an Eldorado on jobs have had their aspirations shattered when government soft-pedaled on the implementation of the N5,000 stipends for the unemployed. Also, recruiting about 500,000 teachers and other unskilled workers had protracted for so long, with many complaining about the slow process.

How Economic Indices Betrayed Jobs

The job crisis didn’t just emerge from nowhere. It was the (mis)calculations by government that first exposed the economy to the current shock, and thereafter, turbulence sets in. Analysts believed that Buhari’s economic policies were instrumental in dealing a big blow on the economy. By placing restrictions on forex, less than one month into office, the administration distorted the nation’s circular flow of forex and its advantages in international trade. It restricted several economic pursuits that fuel jobs and keep them intact.

Added to that, government’s decision to withdraw public funds from banks also contributed enormously in battering the economy. Public funds domiciled in private banks were part of banking resources for generating profits, investment and part of the capital pool to absorb economic shocks. With the withdrawal of such funds, banks could no longer face the economic recession.

The only leeway to cut cost was to resort to retrenchment. Granted, there were cases of abuse of such public funds in the last administration, a gradual process in easing out such public funds would have been more helpful. Thus, the decision and process to withdraw public funds was wobbly and even inchoate, as banks were only left with the option of retrenchment as the only survival mechanism.

Retrenchment

As the economic downturn takes its toll on the nation, many Nigerian workers have been laid off from their work. According to the National Bureau of Statistics (NBS), about 710,698 Nigerian workers have lost their jobs during the last one year of President Buhari’s administration. From the manufacturing, tourism, service industry, oil sector to the banking sector, job losses have continued unabated.

The banking industry appears to be the worst hit by the economic crisis, so also has retrenchment been more severed in the sector. At the last count, Zenith Bank has laid off about 1,200 workers; Skye Bank, 175; Diamond Bank, 400; Ecobank, 1040; Fidelity Bank, 500 workers.

The retrenchment has also affected the aviation sector with many losing their jobs helplessly. With some airline operators leaving the shores of Nigeria, job losses have also skyrocketed.

The continued retrenchment of workers due to the prevailing poor economic situation has had a spiral effect on the country as a whole, with more difficulties in the months ahead.

Government Directive

While government has not been able to come up with a definite remedy to the current economic crisis, it has been quick to issue directive in an attempt to stop mostly banks from further sacking their workforce. Minister of Labour and Employment, Sen. Chris Ngige, in a statement ordering banks to halt retrenchment of workers said: “Following the high spate of petitions and complaints from stakeholders in the Banking, Insurance and Financial Institutions, I hereby direct the suspension of the on-going retrenchment in the sector pending the outcome of the conciliatory meetings in the industry.

“This is as a result of the apprehension by my office of the various disputes in the sector in accordance and in compliance with the provisions of the labour laws of Nigeria. This decision is further predicated on the fact that the continued retrenchment and redundancy by the banks and other financial institutions are jeopardising the outcome of the conciliatory and mediatory processes being undertaken by the Ministry of Labour and Employment.

“In this wise, all the retrenchment and redundancy done in the last four months and all proposed ones should be put on hold, pending the outcome of the proposed stakeholders’ summit for the Banking, Insurance and Financial Institutions’ employers and employees, slated for the first week of July, 2016. All parties are therefore advised in the interest of industrial peace and harmony to maintain the status-quo ante-belum.” Ngige added that “by this directive also, the labour unions should cease all picketing of banks and financial institutions immediately.”

The order notwithstanding, banks were said to have continued the retrenchment.

Ngige, again, in faraway Geneva, Switzerland at the on-going International Labour Organisation (ILO) summit told reporters that “the Federal Government gave the licences to the banks to operate and if its directives are not adhered to the licences will be withdrawn if the need arises. We know what to do. After all, the banks have the licences given by the government. We know what to do. They need to comply.

“Financial institutions need to negotiate. We want them to maintain the status quo. As far as I am the minister of labour I will protect the interest of workers. They are the employers’ body and the people I am talking to are also employers. If you are going to lay off there is a way to declare redundancy, there is a process. Section 20 of the labour Act says it. You must call the unions and discuss with them. You don’t just treat them as slaves in their own country,’’ the minister said.

NECA’s Position

Contrarily, the Nigerian Employers’ Consultative Association (NECA) challenged the minister that government lacks the locus standi to order banks not to sack workers even when it is unavoidable.

NECA Director General, Segun Oshinowo, who is also attending the Geneva summit told journalists that “redundancy exercise is foisted on employers on account of an unhealthy economy and the dynamics of the business, which often demands staff rationalisation.

The Voice of the Business reminded the minister that it is part of the inalienable right of an employer to determine the optimal staff level it requires to sustain its operations’, Oshinowo stated.

He explained that “the right to hire and fire within the rules governing such employment contract. Employers’ rights are Employers’ Prerogatives, which are not subject to ministerial directives.” Oshinowo further held that “where an employer has found it necessary to carry out retrenchment, it would respect the laws of the land and the laid down procedures for redundancy”. He contended that “employers’ expectation from the Minister of Labour and Employment is that he will work hand in hand with other Government Ministries in the establishment of the desired enabling environment to ensure business sustainability, competitiveness and job creation.”

Oshinowo, while passing a message to Ngige maintained that “the Ministry of Labour and Employment runs on the principle of tripartism, which entails regular interactions with Trade Unions as represented by NLC/TUC, the employers as represented by NECA, and government as represented by the Federal Ministry of Labour and Employment. The ministry is expected to respect the rights and interests of employers and workers alike on issues that relate to Labour and industrial relations.”

He also tackled Ngige over his near-autocratic tendencies and “the way and manner the Minister has been running the affairs of the ministry without respect to the prerogative and rights of enterprise as employers of labour.”

Oshinowo went on to state that “for a long time, employers have been advocating that the ministry should be headed by a technocrat in order to avoid the kind of disposition being displayed by the minister which tends towards “populism” and “partisanship” rather than professionalism.”

The Centre Can No Longer Hold

As a way out, the already existing gulf between government and the private sector need to be bridged. Issuing out an authoritative order to employers is not one of the ways of doing that. It starts by fixing the fiscal and monetary policies and rolling out stimulus. To chart the path to sustainable growth that keeps jobs secured, can be attained by interventionist programmes.