Employers Demand 60% Salary Support from FG to Save Jobs

Timothy Olawale
  • Advocates relaxation of lockdown on conditions
  • Backs balancing protection of lives with economic interest

Gboyega Akinsanmi

Amid the devastating effects of lockdown on economic activities, the Nigeria Employers’ Consultative Association (NECA) Saturday unveiled Coronavirus Job Retention Scheme, a plan that requires the federal government to grant the private sector 60 percent salary support till June 2020.

NECA, a platform for over 3,500 private sector employers, warned that failing to consider the scheme might compel private firms nationwide to take hard business decisions, which it said, could lead to the loss of over millions of jobs in the sector.

NECA’s Director-General, Dr. Timothy Olawale explained the imperative of the scheme among other recommendations the forum highlighted in a report it released on Friday on the effects of COVID-19 and subsequent lockdown.

Explaining the scheme during an interview yesterday, Olawale noted that the forum simply requested the federal government “to establish a Coronavirus Job Retention Scheme, where Government pays up to 60 percent of private sector salaries until June as long as workers are not laid off.”

He added that the job retention scheme was similar to the policies the United Kingdom (UK), France and Denmark individually adopted “to reduce the negative impact on businesses and slow the rate of job loss. It is a social obligation on the part of the federal government.

”In Demark, the government grants 70 percent salary support to the private firms. By implication, the private firms will only add 30 percent. In our own case, we are only asking for 60 percent salary support from the federal government while the private firms will bear 40 percent to prevent massive job loss.

“Three days ago, South Africa announced similar package for its private sector apart from economic stimulus. If we cannot follow the example of Denmark, what about South Africa? Out of our 3,500 members, some of them are classified as essential services. Some may not apply. But it is up to the government to come up with modalities for support for the private sector,” he said.

He, therefore, urged the federal government “to provide stimulus to businesses. The announced stimulus, to a large extent, has not addressed the critical needs of businesses that will guarantee sustainability and protection of jobs.”

As canvassed in NECA’s report, Olawale said much more “can still be done now, not belatedly, to save jobs. Such direct interventions as direct wage or income support, wage subsidies, tax credits or tax deferrals, short-term work schemes, and moratoriums on loan payments are needed to save jobs.”

NECA’s director-general called for the relaxation of the lockdown or its outright removal, which according to the report, was essential to managing the socio-economic impact of the lockdown on businesses nationwide.

With a large population of the country in the informal sector and many surviving on daily wages, Olawale noted that the lockdown “has the tendency to further cripple businesses, hasten the rate of job loss, and increase the level of poverty with the consequential effect of increased insecurity.”

NECA’s director-general, therefore, argued that a relaxed lock-down with legislated state and national guidelines to prevent the spread of the COVID-19 “will go a long way in maintaining the gains of the past few weeks.”

He said the guidelines should include compulsory use of sanitisers, free protective wears (where necessary), maintenance of social distancing, increased education and awareness (posters, etc.), total banning of religious, political and social gatherings, limited number of passengers in public and private transportation and strict enforcement of same, amongst others.

While the risks of total relaxing too soon, are very real, Olawale said gradual relaxation could be considered under these stringent conditions “as done in Ghana, Germany and some other countries, although with a high sense of alertness.”

He explained the exigency of balancing protection of lives with economic interests, especially considering that business operations were shut to safeguard human lives and the need to protect the economic foundation of the country.

Olawale said: “Balancing the protection of lives with economic interests should, ordinarily not be difficult. While protection of life should take precedence, the need to protect the economic foundation of the nation cannot be discounted, as the economy will ultimately sustain life.

“While the federal government take decisive steps to protect lives, efforts should also be made to keep productive activities going. Without delicately balancing the scale, the consequential negative effects of the pandemic will not only include unimaginable loss of lives, massive job losses and heightened insecurity, it might also lead to unnecessary social revolt.”

In Lagos State, for instance, Olawale observed that the majority of businesses “are now in their fifth week of business shutdown and four weeks on in the FCT and Ogun State while the impairment of business varies in other states.

“While businesses remain passive and unproductive with attendant mass losses of revenue, overhead costs remained. Wages obligations to workers and several statutory payments without respite remained constant.

“The federal government had spoken well in urging businesses to continue to bear the brunt without recourse to staff rationalization. But the lockdown has overstretched the limits and businesses are beginning to buckle under the weight of the burden it is carrying without corresponding productivity from workers and necessary support from Government.”