Category: Labour

The Nigeria Employers’ Consultative Association (NECA) believes that the Federal Government will be leaving a legacy of multiple taxes, unemployment, high inflation, debt burden, economic crisis for the incoming government. It says that these will constitute big challenges for the next government. TOBA AGBOOLA reports.

As the nation struggled to recover from the COVID-19 pandemic, which inflicted leadership and sustainability challenges across the globe, businesses were forced to operate under a very tight and unfavourable environment, made worse by systemic contradictions.

The Nigeria Employers’ Consultative Association (NECA) said while last year was a terrible for business, things might not change in the year.

In his review of last year and expectation for the year, the Director-General of NECA, Mr Wale-Smatt Oyerinde, said the Russia-Ukraine war changed the narratives from recovery from the COVID-19 effects to sustainability, in view of the consequential effects of the war. He said the needless war caused a major increase in the cost of energy across the world, with Europe greatly affected.

The war, according to NECA, also heightened the disruption in global value chain, which further compromised business sustainability. The impact of the war on energy and food distribution remained a concern for not only businesses but also global leaders.

Furthermore, NECA said the withdrawal of liquidity in the world economy prompted the increase in interest rates and the consequential effect on nations with high debts, including Nigeria. It could be adduced that the war had further deepened the level of poverty and caused a spike in inflation rate, Oyerinde said.

2023  Budget

NECA expressed concerns over the 2023 National Budget, saying poverty, unemployment, rising debt profile, and others were not likely to change as President Muhammadu Buhari signs the N9.73 trillion Appropriation Bill to Law.

The umbrella body for employers and voice of the business community said it was imperative for the government to mobilise and strengthen revenue sources to avoid financing the budget through high-interest-rate borrowing, thus increasing future debt service.The “Budget of Fiscal Sustainability and Transition” was designed to achieve, among other things, the strategic objectives of the National Development Plan 2021–2025.

“With estimated N9.73 trillion and N21.83 trillion budgeted as revenue and expenditure and a fiscal deficit provision of N12.1 trillion, the budget is ambitious while there are concerns about its basic fundamentals. The ‘rushed’ passage of the budget by the National Assembly calls for concern as this could not have enabled the wide consultation of critical stakeholders whose input would have added value to the budget proposal,’’ Oyerinde said.

Oil price

The US$75 per barrel oil price assumption for the year looks realistic, given that the commodity averaged $99pb in 2022 even as OPEC+ remains fixated on regulating oil production to stabilise energy prices.

However, global recession fears in 2023 could dampen oil demand with an adverse effect on prices. The oil production benchmark of 1.69 million/barrels per day also seems somewhat ambitious.

The combination of factors such as large-scale oil theft, frequent shut-ins, vandalism, and International Oil Companies’ (IOCs’) divestment have continued to depress oil production in 2022.

Other challenges hindering businesses  to create jobs

NECA said it would not be out of place to say that this government would be leaving a legacy of taxes, levies and fees for the Organised Private Sector (OPS).

”The quantum and rate of taxing organised businesses has been quite unprecedented in the last few years.

“At the last count, organised businesses were made to pay over 50 various taxes, levies and fees (both legally and illegally). To further burden the already over-burdened organised businesses, the National Assembly passed the Finance Bill, increasing the Tertiary Education Tax (TET) rate from 2.5 per cent to three per cent. It is worrisome that an increase was implemented in 2021 through the Finance Act 2021.

“This singular increase effectively raised the Corporate Income Tax (CIT) to about 36 per cent, which undoubtedly, comparatively, is one of the highest rates in the world. All these not only created enormous challenges for businesses, they also hindered them from maximising their full capacity to create jobs and wealth.

“As we progress into the year, the outgoing government must all within its powers to ensure some level of stability in the polity. The efforts at reducing oil theft should be stepped up. The government must take a second look at the challenges of the multiplicity of taxes and the introduction of new ones. It will be counter-productive to continue to increase taxes and invariably burden many businesses out of existence. While we cannot control global events that affect us, we can do well to resolve the many contradictions inherent in our polity. In 2023, the ripple effects of the Russia-Ukraine war will continue to be felt as global fiscal tightening will continue with consequential effects on Nigeria and other struggling economies.

“Energy challenges will continue in Europe with Russia weaponising gas and food supply. The removal of fuel subsidy in Nigeria could trigger protest from organised labour even as the purchasing power of average Nigerians continue to dwindle due to increasing inflation and high unemployment rate. It is also expected that businesses will face more challenges as the quest for sustainability and not competitiveness continues.

“The incoming government must be bipartisan and decisive in addressing the myriad of challenges that stifle the growth of businesses and, invariably, national development. The challenges are huge, but with the right policies and people at the helm of various Ministries, Departments and Agencies (MDAs) and with collaboration with the OPS in policy design, implementation and monitoring, these challenges are surmountable.

“With the National Bureau of Statistics reporting over 33.3 per cent unemployment rate and over 63 per cent of persons living within Nigeria, and about 133 million people multi-dimensionally poor, the best that any government can do is to facilitate a favourable environment for businesses to thrive.”

Subsidy scam

NECA charged the Federal Government to unravel the scam surrounding fuel subsidy and unveil a plan to remove it.

“It was distressing to witness long queues in filling stations across the country when the government claimed to have paid trillions in petrol subsidy.

“The government has to stop making a mockery of the country and the citizens. Notwithstanding the subsidy payment, Nigerians are still compelled to endure long queues to buy it at almost a black market rate, fuelling inflation and economic hardship.”

Issues of concerns in 2023

Oyerinde continued: “As we progress in year, it is imperative that the outgoing government does all within its powers to ensure some level of stability in the polity. The efforts at reducing oil theft should be stepped up. It is important that the government should take a second look at the challenges of the multiplicity of taxes and introduction of new ones. It will be counter-productive to continue to increase taxes and invariably burden many businesses out of existence. While we cannot control global events that affect us, we can do well to resolve the many contradictions inherent in our polity.

“In 2023, the ripple effects of the Russia-Ukraine war will continue to be felt, global money tightening will continue with consequential effects on Nigeria and other struggling economies, energy challenges will continue in Europe with Russia weaponising gas and food supply, the removal of fuel subsidy in Nigeria could trigger protest from organised labour even as the purchasing power of average Nigerians continue to dwindle due to increasing inflation and high unemployment rate. It is also expected that businesses will face more challenges as the quest for sustainability and not competitiveness continues.”

Ways out

Oyerinde added: “On policy recommendations for the incoming government, we propose that the incoming government must demonstrate strong political will and nationalistic zeal to not only unravel the misery surrounding the fuel subsidy, on which over N4 trillion was expended in 2022, but also name and prosecute those found to have deprived the nation of huge developmental funds.

“The next government’s priorities should include ensuring macroeconomic growth and stability; getting the nation’s refineries to work and removal of the fuel subsidy; ensure a fair and just system of taxation, which must include the harmonisation of taxes across the Federation; alignment of the Fiscal, Monetary and Trade policies to stimulate growth and increase investor’s confidence; review the national security architecture as this will have a ripple effect from a reduction in the loss of lives, high cost of transportation, food inflation, among others.

“It was reported that one of the Electricity Distribution Companies lost over N30billion to vandalism, give more attention to trade and non-oil exports as alternative for Foreign Exchange earnings, develop a more robust monetary policy to defend and increase the value of the Naira, be deliberate in creating plans to reduce the bourgeoning debt profile; facilitate a more conducive environment for businesses and ensure an all-inclusive growth across sectors.

“While it is obvious that the road ahead will not be easy, it is expected that the government will refocus at ensuring economic stability and create a foundation for economic renaissance, post-May 2023.

“Structurally, the nation is dealing with a multi-facet economic challenge and lack of competitiveness in our manufacturing industry. As we deepen our participation in the Africa Continental Free Trade Area Agreement (AfCFTA), we cannot, but enable the real sector of the economy to stabilise to be able to compete at the African trade market. Not doing so will sound the death knell for Nigerian businesses and expose the economy to dire consequences. The incoming government must be bipartisan and decisive in addressing the myriad of challenges that presently stifle the growth of businesses, and invariably national development.

“The challenges are huge, but with the right policies and people at the helm of different Ministries, Departments and Agencies, and with close collaboration and partnership with the OPS in policy design, implementation and monitoring, these challenges are surmountable.”

The Trade Union Congress of Nigeria, TUC, has expressed sadness over Nigeria’s continued importation of petroleum products, urging the government to make petrol available for Nigerians.

In a statement, the body said: “The TUC rejects the clamour by some politicians and political office holders to continue the importation of petroleum products at prohibitive costs while simultaneously, campaigning and making moves to stop fuel subsidy.   “Politicians who love Nigerians would first return the country to local refining thereby creating mass jobs and making the products cheap, accessible, and available before contemplating the removal of fuel subsidy”.

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On privatisation, the umbrella body for senior workers in the country said “Irrespective of the nomenclature given or the deceptive garb of efficiency, our experience as a people, shows that privatisation is the mere transfer of public wealth into private hands. The example of the electricity sector clearly indicates also that the private sector can be even less efficient than the public sector. Therefore, we not only demand the review of the entire privatisation exercise and transparent accountability of its proceeds but also call for the reversal of privatised entities. For instance, in the electricity sector where the new ‘owners’ have failed abysmally or merely engaged in asset-stripping.We believe that anybody or group pushing for further privatisation of our national assets does not mean well for Nigeria.”

Meanwhile, the labour body, in a review of 2022, stated: “The year 2022 was quite challenging in virtually all fronts including security, politics, economy, health and social life, but there is hope for a glorious 2023 if we are ready to birth the necessary change and hold our leaders accountable as Nigeria we earnestly desire can only be achieved through collective struggle”.

•Accused NLC, TUC of keeping quiet

The coalition of All Workers Convergence (AWC) has asked all the  workers in Nigeria  to resist the systematic increase in the pump price of petrol.

The national coordinator of All Workers Convergence (AWC), Comrade Andrew Emelieze made the call during a protest tagged; “Operation Resist Hardship” by workers, students and civil society coalition, in Oyo State

He accused the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC) and other unions in the country of being unnecessarily silent and watching innocent Nigerians suffering.

Comrade Emelieze said contrary to what the NLC, TUC and other workers are noted for, the silence of the union leaders at this crucial time is becoming worrisome and disturbing.

He stated that the time has come for the leadership of the NLC , TUC and worker unions in Nigeria to rise up and jointly reject the systemic increase in the pump price of petrol.

Comrade Emelieze alleged that the Federal Government is hell bent on increasing the pump price of petrol and that it is only the NLC, TUC and other unions that can fight for the masses.

“For a start, it shall be protest every Mondays, Monday protest, Nigerians Arise, No retreat, no surrender, It shall be from #EndSARS to #EndHardship people arise . What we need now is permanent protest,” he said.

The Maritime Workers’ Union of Nigeria (MWUN) has urged the Federal Government to expand the ports to reduce the load on the Lagos Ports.

 Also, the union said the Federal Government should procure port machinery and rail services for the ports.

President-General of MWUN, Dr. Adeyanju Adewale, stated this  at the union’s National Executive Council (NEC) in Lagos.

He called on the Federal Government’s agencies in charge of dredging, wreckage packing and channelling of inland waterways, among others, to dredge Calabar, Escravos, Warri and Port Harcourt ports.

Noting that the maritime sub-sector plays a vital role in Nigeria’s economy, he said the role of ports, jetties, terminals, oil and gas platforms could not be over-emphasised.

Considering the benefits of the  maritime sector, he said it would be improper for any government to allow such a critical sector to decline.

According to him, doing so would have serious implications.

He lamented that despite the amount of progress and improvement in operations due to port concession, there were still problems at the ports.

He listed challenges like high port charges, delay in cargo clearance, multiple taxation and development of intermodal transport, as well as low job creation.

He said the Nigerian Ports Authority (NPA) could only account for about 4,000 employees as against 13,000 workers employed before the ports concession.

This, he said, was leading to the gradual phasing out of junior workers in NPA. He called on the authority to as a matter of national importance employ more adequate personnel spread across all operational areas in the port.

As a workers’union, Adewale noted that the employment structure in most government’s maritime parastatals have over the last decade assumed an inverted pyramid employment structure, where there are more of senior staff than junior, thus affecting their capacity to man port operations in jetties and terminals.

He said because there was no National Joint Industrial Council (NJIC) agreement in place in the shipping sector, employees were subjected to inhuman conditions that impoverish and degrade them.

To this end, the union called for the state of emergency in the industry, calling on the Shipping Association of Nigeria (SAN) and other stakeholders to save it.

On the International Oil Companies (IOCs), many of whom the union alleged, have disobeyed the stevedoring regulations, the union called on the government to get them to conform to the labour laws and standards.

Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, who commended Adewale for his selfless service, also appreciated the union for creating a peaceful environment devoid of strikes.

On IOCs alleged disobedience to the nation’s laws, Jamoh said the agency would work with critical stakeholders to resolve the matter amicably.

NPA Managing Director, Mohammed Bello-Koko, who was represented by General Manager, Human Resources, Ahmad Umar, said the authority has obtained approval to recruit more employees to address the lapses on shortage of workers.

•’Fuel subsidy’s claim is a scam’

As next year’s election approaches, the Nigeria Employers’ Consultative Association (NECA) has called on the incoming government to reduce the cost of governance, curb corruption and budget padding.

NECA lamented the rising public debt, with the government’s debt crossing the N41 trillion mark and an unregulated borrowing by state governments.

Speaking in Lagos, the Director-General of the association, Adewale-Smatt Oyerinde, noted that the outgoing year remained one of the most challenging for organised businesses. 

He said the pandemic-inflicted leadership and sustainability challenges forced organisations to take extraordinary measures in real time, with zero planning. 

He said: “Things changed drastically and dramatically, leaving no industry across the world unaffected. In Nigeria, enterprises were forced to operate under excruciating circumstances, made worse by inherent systemic contradictions. 

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“As organisations faced sustainability issues, they, at the same time, had to deal with rising energy cost, regulatory gangsterism, inconsistencies and contradictions in the fiscal and monetary policies (which has made doing business unattractive and created clogs in the wheel of attracting Foreign Direct Investment), rising inflation and increasing cost of doing business, which invariably reduced the capacity utilisation of industries. While some of these challenges are not peculiar to Nigeria alone, the government’s approach to solving them remained suspect and does not inspire confidence.”

Also, the DG stated that the government should stop making mockery of the country and its citizens. 

“It is distressing to witness long queues for petrol when the government claimed to have paid trillions in petrol subsidy. Notwithstanding the subsidy payment, Nigerians are still compelled to endure the long queues to buy it at almost black market rate, fueling inflation and economic hardship. The government must unravel the scam surrounding the subsidy and make pronouncement on a definitive plan to remove it,” he said.

Oyerinde noted that the tax system is skewed against responsible tax payers. He said the incoming government must reform the tax system to create incentives for payers and expand the tax net rather than the over-burdening of legitimate businesses. 

“Consistency in the tax policy will improve stakeholders confidence rather than the short-sighted attempt to sabotage the established roadmap set out in the 2022 Fiscal Policy Measures and Tariffs Amendments (FPM 2022), which covers 2022-2024. While it was gladdening to hear that the government had jettisoned the proposed increases in excise tax a more collaborative and evidence-driven approach should be adopted for future changes. 

“While the government and some of its agencies sometime act as all-knowing, we urge inclusiveness in policy design, implementation and monitoring. As private sector is, arguably, the largest contributor in terms contributions to Gross Domestic Product (GDP), it is, therefore, imperative to include Organised Private Sector (OPS)in economic-related decision of various arms and tiers of government.”

Oyerinde said it is no gainsaying that the country faces enormous challenges, mostly self-inflicted. 

“We, therefore, urge the current and incoming government to explore policy options as suggested and adopt a more robust, all-inclusive strategy, focusing not only on the diversification of the economy, but also on the imperative to reform the fiscal structure to reflect fiscal federalism, promote healthy competition and drive productivity. The government also  should address short term appropriation for long term infrastructure to avoid  white elephant projects and create a template for assessing and evaluating the performance of Regulatory agencies to national and business sustainability, among others,” he added.

Food, Beverage and Tobacco Senior Staff Association (FOBTOB) members have picketed the premises of Nigeria Distillery Limited, Sango Ota,  Ogun State, over  the sack of its unit branch Chairman, Comrade Samson Salau.

FOBTOB President Comrade Jimoh Oyibo said their picketing the company followed the refusal of the management to heed the appeal of the union to rescind its decision and reinstate the embattled worker.

Oyibo said: “Sometime in September 2022, our branch head, Comrade Salau was alleged to have made uncomplimentary remarks against the company’s Financial Director. He allegedly called him a thief. 

“On the basis of mere allegation and hearsay, which is unverified till this day, the management terminated his appointment. This is unacceptable to us. Our colleague was not given fair hearing and this cannot fly. We met with the MD over the issue. He set up a panel that reviewed the matter. We were not satisfied because management was still adamant. We met at NEC and resolved to picket the company.

“We are demanding that Comrade Samson be reinstated without further delay.We deliberated with management with a view to resolving the issue. Another meeting with management is scheduled to hold on December 29, 2022.”

As early as 7am, FOBTOB members gathered at  the entrance of the company, singing solidarity songs while no movements were allowed into the company.