Ngige and threat of licenses withdrawal
The federal government has threatened to sanction banks and possibly telecommunication companies which are currently embarking on mass sacking of staff to reduce high cost of operations and dwindling revenue occasioned by scarcity of foreign exchange, poor and decaying infrastructure, high cost of fuel and diesel, difficult operating environment among others. Whereas banks have since commenced the exercise, telcos are said to be compiling the list of those to join the bourgeoning labour market.
Chris Ngige, minister of labour and employment, last week, warned the sectors to halt the gale of sack. Similarly, last Tuesday, Ngige at the 105th session of the International Labour Congress (ILC) in Geneva, Switzerland warned that government might be forced to withdraw their licenses should the sack continue. The minister expressed shock that his earlier directive was disregarded. “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government gave the licences to the banks to operate and if its directives are not adhered to the licences will be withdrawn if the need arises,” he said.
“We will go a step further if they continue. We know what to do. They need to comply. They need to come to the negotiation table. We halted the spate of sack in the oil industry and we succeeded.
“Even 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 and you want us to keep quiet.
“We want them to maintain the status quo. As far as I am the minister of labour, I will protect the interest of workers; same to the telecommunication companies, they are also talking about compiling lists without discussing with anybody.”
There is no doubt that the current economic situation in the country has led to massive job loss, just as it is becoming increasingly difficult for many Nigerians to feed well and is turning many of them to beggars.
But that isn’t enough to warrant such threats from the minister of labour. We advise government that rather than issuing threats to organizations that are strictly for profit, it should rather strive to make the operating environment conducive for businesses to thrive.
While we also call l on banks and the telcos to exercise restraints in laying off workers and to follow laid down procedures, we consider the threat by government ill advised, reactive, anti-business and incapable of solving the problem of unemployment and loss of jobs in the country. We must emphasise that the government is firmly responsible for the downturn of the economy which is now affecting all companies negatively thus necessitating their decisions to lay off workers. With the government’s archaic ‘command and control’ foreign exchange and statist economic policies, economic recession was almost inevitable and predictable. Why the government didn’t realise this or saw it coming baggers belief.
In Q1 2016, the economy suffered from energy shortages and price hikes, scarcity of foreign exchange and depressed consumer demand, amongst others. Consequently, the economy contracted by 0.36% (year-on-year) inQ1 2016, compared with the growth of 3.96% in the corresponding period of 2015 and 2.11% in Q4 2015. Quarter-on-quarter (Q-o-Q), the GDP contracted by 13.71% in Q1 2016.
Already, inflation is 13.3 percent, unemployment has also risen to over 12 percent and the Central bank of Nigeria (CBN)’s Monetary Policy Rate (MPR), the rate at which it lends cash to banks is at 12 percent.
All these have made returns on investments to be negative due to the rising inflationary trend. These negative indicators call for concerted efforts on government to continuously strive to make operating environment conducive which will automatically bring down the cost of doing business.
Also, there is need for quick action on the guidelines for the promised flexibility in the foreign exchange market to reduce pressure on the local currency and make dollars available for these firms to import raw materials or meet their financial obligations to their foreign partners.
The minister must realise that Nigeria is not the only investor and business destination and threatening investors will not do it. It will rather brand the country as an unfavourable business destination.