Category: Labour

The Organised Labour and employers have urged the Federal Government to deal with the multifarious challenges facing the country. They argued that if government does not resolve these problems before the next administration takes over, the economic crisis will be worse. TOBA AGBOOLA reports.

There are indications that the economy is headed for the rocks against the backdrop of insecurity, oil theft, inflation, rising debt profile and unemployment, ineccesant strikes, multiple taxes and forex crisis bedevilling the country.

In view of the above-mentioned problems, experts have urged the Federal Government to rise up to the challenges to salvage the economy.

They said many Nigerians were toiling under excruciating economic condition and that the rate at which poverty had eaten deep into the fabric of country was not only frightening, but also heartbreaking. This devastating national situation has left over 70 million unemployed in its trail, they noted.

Also, about 70 per cent of Nigerians has lost at least one stream of income or the other since outbreak of the COVID-19 pandemic and the attendant lockdown.

Worse still, inflation also skyrocketed. Food inflation reached a 15-year high last year, hiting 22.95 per cent in March. Import restrictions on rice and rising fuel costs have contributed to inflation. Overall, inflation and poverty levels have been on the rise, further compounding the crisis.

The experts said insecurity had assumed many dimensions, forcing the country’s political and economic managers and, indeed, the entire nation, to rue the loss of their investments, among others.

The number of violent crimes such as kidnappings, ritual killings, carjacking, suicide bombings, religious killings, politically-motivated killing, violence, ethnic clashes, and armed banditry and other crimes has risen beyound expectation, they said.

President, Trade Union Congress (TUC), Comrade Festus Osifo, at a briefing in Lagos, decried the multifarious challenges, stating that they were fostering social unrest and suffocating industrial and business activities.

He lamented that Nigerians were bombarded daily with reports of banditry, energy scarcity and price hike, kidnapping, Academic Staff Union of Universities (ASUU) strike, free fall of the naira, and others.

Solution

Osifo urged the Federal Government to focus attention on the digital economy as one of the ways to tackle the challenges. He said the digital economy was expanding at a very fast pace and had transitioned from being a luxury to an absolute necessity.

“Information and Communications Technology sector has been contributing an impressive percentage to the Gross Domestic Product (GDP) of Nigeria.

“This clearly shows the importance and potential of the ICT sector to our job creation and economic diversification agenda.

“Already, Nigerian ICT startups are leaving their mark on the global stage. We shall continue to encourage and support such digital en­trepreneurs to develop inno­vative solutions for local and global challenges,” Osifo said.

On the ongoing strike by  ASUU, he called on the Federal Government to borrow money to meet their demands.

He said: “The National Assembly said the 2023 budget will be in deficit and they are proposing N19 trillion and the funds they will generate will not be half of the money that will be borrowed.

“It is not our advocacy; the government had already made a plan. The government should take part of the money to solve the problem of ASUU.

“If the money they want to borrow is to complete the Second Niger Bridge or a railway line, the question is: Who wants to use them? Those sectors are not more important than education.”

Osifo said the country had been borrowing to solve its infrastructural problems and that  infrastructure should not be more important than its citizens.

He said the country must get its priority right and that the government needed to put on its thinking cap.

He lamented the brain drain in the country, saying a government that fails to fix education is a joker.

The Nigeria Employers Consultative  Association (NECA) charged the Federal Government to provide a lasting solution to the incessant challenges in the oil sector through building new refineries.

Its Director-General, NECA, Mr. Adewale Oyerinde, described as a sabotage the high level of crude oil theft, as well as pipeline vandalism in the country.

Oyerinde lamented that the trillions being spent yearly on subsidy could build a fresh refinery. He appealed to the Federal Government to fix the refineries to refine locally, instead of importing refined products, which, according to him, causes capital flight, as well as loss of huge revenue to the country.

“We should maximise our revenue by refining locally,” he stated.

He reasoned that beyond the issue of oil theft, the pipelines have also aged, necessitating their shutdown. He stressed that turnaround maintenance of the refineries might not be the best option.

The NECA boss noted that for years the government had been budgeting huge resources for turnaround maintenance without anything to show for it.

He insisted rather that the government should either build new ones or encourage the private sector to do so, as in the case of Dangote Refinery, which would save the country funds.

While urging the Federal Government to remove oil subsidies and rejig the economy, the NECA boss said the economy has not had it so bad like this, listing multiple taxes, high inflation rates, increase in foreign debts, unemployment as well as incessant strikes, among other economic hiccups.

He stated that the money spent on subsidy could be used to build new refineries, instead of few Nigerians benefitting from such government’s inefficiency.

He, however, recalled with dismay, the recent statement by the Federal Ministry of Petroleum Resources, that it had no financial records of fuel subsidy payments from the  2017 to last year.

“Let us face the consequences of the subsidy removal once and for all. I also support the labour position that subsidy is a scam,” he said.

Moreover, Oyerinde condemned the excessive taxation being imposed on businesses, saying it is affecting the private sector as well as businesses.

He said: “As we are trying to bridge the gap, the Federal Government is creating a bottleneck for private sectors through multiple taxes. There is a need for the government to give a clear roadmap. The government should think on how to cushion the pressure of inflation like in other developed countries of the world.’’

Oyerinde lamented how some government agencies slow down private sector operations through policies.

He said the organised private sector would continue to deepen their engagements with government for businesses’survival.

Oyerinde, however, commended the Federal Government for heeding the call to suspend the proposed telecoms tax in view of the economic challenges faced by operators and Nigerians.

He said: “We commend the Federal Government for suspending the telecoms tax as it has the potential to compound the challenges of the sector and further burden Nigerians. At a time the purchasing power of the citizens is being eroded by inflation and other negative economic indices and the telecoms industry is critically challenged, the best that the government can do is to provide relief for the citizens and business owners, notwithstanding its dwindling revenue.”

Employers in the chemical sector noted that the outbreak of the Ukraine-Russia war further worsened industrial and business activities around the globe.

Executive Secretary, Chemical and Non-Metallic Products Employers Federation (CANMPEF), Mr. Femi Oke, said: “There have been disruptive impact on international trade with cost of staple commodities and energy at a historic high-level, straining standard of living across the globe with developing countries hit the hardest.

“This global struggle is further compounded by social and economic stress from COVID-19 pandemic and its lockdown restrictions. In response, some Monetary Policy Authorities – the United States, Australia, including Nigeria — resorted to interest rate hikes.”

Oke said the sustained scarcity of foreign exchange in the productive sectors had worsened the inflation, resulting to the purchase of the limited supply at prohibitive cost.

On the way out, CANMPEF chief called for an approach that combines the use of fiscal and monetary policies to address the looming recession.

He asked: “How can Nigeria leverage its available resources to achieve maximum output, commencing with food security and healthcare needs?

“What sectors of the productive economy has shown the most resilience since COVID-19 pandemic outbreak and what can be done to further support its growth?”

He stated how, unfortunately, farming, a once-noble profession, had become a high-risk venture in some parts of Nigeria due to farmers and herdsmen’s clashes.

He said: “Insecurity of varied fashion and dimensions are prevalent across the country. To say the least, investors have flagged certain regions as off-limit zones. Unfortunately, business places and worship centers are not speared.

“With a general election upon us in a few months, the emergence of a new government whose economic policies may not align with the present is not unexpected (policy conflict).”

He opined that both the private and public sector have role to play to sustain peace through promotion of knowledge,

On the part of the government, the CANMPEF scribe opined that the need to strengthen administrative machinery to deliver on its obligation to its populace.

According to him, the cost of ASUU strike on the economy transcends both human resources and economic loss.

“The number of youth workforce migration to other climes in search for greener pastures is at an all-time. Thus, creating short and long term talent draught that our industries require to reposition itself and compete favourable in the new continental market (AfCFTA),” he said

He added that government should target its economic policies toward scaling up local production and efficiency with impact on quantitative and qualitative improvements, as well as impose strict compliance of Executive Order (003) across its MDAs to stimulate further patronage of made-in-Nigeria goods.

Experts have described the frequent strike by the Academic Staff Union of University (ASUU) as a failure of industrial relations and collective bargaining in our polity. They wondered why government should continue to sign an agreement  it would not implement, thus, leading to the ‘unsavoury recurring decimal of strikes’. TOBA AGBOOLA reports.

The incessant strikes by university lecturers have been at the centre of the perennial battle between Academic Staff Union of Universities (ASUU)  and the Federal Government. This, unfortunately, has been to the detriment of the economy and society. No one needs be told that frequent strike is a failure of industrial relations and collective bargaining.

This raises the question: if strikes have been of little impact in the achievement of the objectives of the teachers, isn’t it time for the lecturers to re-strategise?

Also, ASUU’s latest outburst over the No-Work, No-Pay stand by the Federal Government is seen as out of place by experts.

They insisted that the action of the government was in line with the laws, contending that ASUU’s complaint was like eating one’s cake and wanting to have it.

The former Director-General, Nigeria Employers Consultative Association (NECA), Mr. Segun Oshinowo, said it was time the government re-examined itself and realised that time had, indeed, come for a new approach to collective bargaining in the tertiary education sector to banish forever this unsavoury recurring decimal of strikes.

To him, the employer cannot be the government; ASUU has consistently and inappropriately ignored the employer,  which is the management/council of universities.

He said: “I sympathise with the lecturers. They are not well paid compared with their colleagues elsewhere. Neither the hygienic nor the unhygienic conditions of employment  are enabling and motivating. Contending with those two evils could indeed be very frustrating.

“And to the government: why continue to sign an agreement that you will not be able to implement, thereby creating the reason for a strike? If I may ask the question: who is the employer of the lecturers?

“The university is, of course.  And who is the owner/ financier of the universities? The government and in our case two different levels of government: state and the federal. Are they one and the same? Legally speaking, in the context of an employment relationship, they are not. ASUU as a union representing the workers needs an employer, in the real sense of it, to relate with.

“This is wrong and I believe time has come for the government to put a stop to that. ASUU, whether as a national union or through its branches in universities, should be negotiating with the management/council of universities – at state and federal universities.”

Oshinowo said the government over the years had allowed itself to be boxed into a corner of an employer when in the real sense of it, it was not.

He said the university was the employer of ASUU members. “The letter of employment of each lecturer bears the insignia  and identity of the university that has employed him.  The government’s acceptance of the role and disposition of ASUU is to its detriment and a major reason for this perennial strike,” Oshinowo said.

Oshinowo said the government had, unwittingly and, perhaps, ignorantly created an unsustainable bargaining structure, which fitted perfectly into ASUU’s unrealistic objective of ensuring a uniform condition of employment for all lecturers in public universities when the operating and financial conditions of the universities were  not the same.

His words: “I believe time has come for the government to take the bull by the horn by initiating a  lasting solution to this perennial strike problem which should begin with an urgent reform of the industrial relations and collective bargaining structure  in the tertiary education sector, such that the owner/financier of the business (the government), like shareholders of a business enterprise, is freed from direct involvement in employment relationship with the union. It should then usher in a new dispensation where the authentic employer (the university) engages the “real” union (branch of ASUU in the university).

“Once the above is done, it becomes the responsibility of each management/council of the university (the employer) to negotiate with the branch ASUU in the context of its ability and capability to honour the terms and conditions of employment of the lecturers as contained in their letters of employment and any agreement struck with their union.”

‘No-Work, No-pay’ principle is legal

On the No-Work, No-Pay principle, a former Vice President of Nigeria Labour Congress, NLC, and the Director-General of Michael Imoudu National Institute of Labour Studies (MINILS), Issa Aremu, said: “Of course the Labour law is clear: no-work, no-pay. Last year, President Muhammadu Buhari commendably gave waiver to health sector workers after protracted strikes in 2021 and ordered the payment of striking resident doctors. But ASUU’s months’ long strike has, unfortunately, reopened the ‘no-work, no-pay’ debate.

“All parties should embrace collective bargaining and avoid the pitfalls of ‘no-work, no-pay debacle. Strikes are not warfares. We should not weaponise industrial disputes. Once the parties are talking and committed to negotiation there should be cessation of hostility.”

He advised ASUU to suspend the strike that has proved too unhelpful to the education sector while the government should pay the lecturers for work done.

Aremu said most issues in ASUU were not about dispute of rights but dispute of interests such as the new payment system which, in the first instance, should not have led to this unnecessary industrial warfare.

“When strikes become an issue,  they have lost their relevance for the working people. This development calls for constant capacity building for stakeholders in industrial relations. MINILS is planning a national conversation soon on ‘Rethinking Collective Bargaining Process and Strikes,’” he said.

To the Trade Union Congress (TUC), the Muhammadu Buhari-led government could resolve the major issues that caused the shutdown of tertiary education, and reopen schools within 48 hours, if truly serious with governance.

TUC noted that for a Federal Government that used about N1.4 billion to buy cars for a sovereign nation, Niger Republic, to go about telling its citizens that it doesn’t have what it takes to keep the country’s university education functional, was indeed shameful and embarrassing.

Its President, Comrade Festus Osifo, frowned at the manner the Federal Government was handling a crisis that involved the future of students which, it said, by extension was the future of the country.

“You will agree with me that where there is a will, there is always a way. Recently, the same Federal Government that is giving excuses on resolving the issues that caused tertiary education in Nigeria for about five months, spends about N1.4 billion to buy vehicles and donate to the government of Niger State.

“If the government is serious, I tell you it will resolve this strike issue and open our schools within 48 hours. Evidently, it is the value that is placed on education and in our university system is what we are seeing today. It is not about finances, rather it’s about priorities. It is about what they choose to prioritise. And if education does not deserve to be a top priority of the government of a country, then it is shameful and pitiable.

”So, it is actually the will. When the will is strong, the way will actually be found. I reiterate it is about the will and the value the government places on education,” TUC said.

Despite the unfortunate scenario, there is still no end in sight, or any idea when this round of industrial action would come to an end, especially with last Monday’s extension of the strike by another four weeks.

The strike, which began on February 14, entered its 200th day today, after the Federal Government failed to meet some of ASUU’s demands.

While this happens, children of the political elite are enjoying their seamless tertiary journeys abroad. They are joined by children of the haves, including those of military brass hats, while offsprings of the have-nots, the working class, and the majority of Nigerians are left to bear the brunt.

Among other things, the ongoing industrial action is a result of the Federal Government’s failure to meet ASUU’s demands on the revitalisation of public universities; earned academic allowances; University Transparency Accountability Solution (UTAS); promotion arrears; renegotiation of 2009 ASUU-FGN agreement, and inconsistencies in the Integrated Payroll and Personnel Information System (IPPIS) payments, among others.

THE Nigeria Employers’ Consultative Association (NECA) has urged the Federal Government to reappraise its monetary and fiscal policies to address the challenges confronting the nation.

Speaking in Abuja, its Director-General (DG), Mr. Wale-Smatt Oyerinde, said rather than holding on to and promoting policies that have proven not to be effective within the context of the challenges, the government would do well to reappraise the monetary and fiscal policies to gauge their effectiveness and relevance.

He said a deliberate and transparent process of evaluating economic policies should be put in place, with the Organised Private Sector (OPS) who are critical stakeholders at the centre.

Noting the various interventions by the Central Bank of Nigeria (CBN), Oyerinde averred that the deployed initiatives had the capacity to stimulate and drive the economy towards the path of sustained growth if the impediments were removed.

“These initiatives and policies comprise the exclusion and prohibition of about 47 items from eligibility to access FX on 23rd June 2015 and the introduction of the e-Form ‘A’ for Forex Online in July, 2021.

“Unfortunately, many of these interventions have not yielded the desired outcomes :  enriching the flow of FX, reflating the economy and promoting enterprise competitiveness, Oyerinde said.

In view of the significant impact of the misalignment of the fiscal and monetary policies of the government, Oyerinde said it was important for the nation’s monetary and fiscal authorities to close ranks to reduce the contradictory tendencies of the policies for the good of the nation.

The NECA chief pointed out that, while the monetary policies aimed to reflate the economy through various interventions, the fiscal policies tended to stifle the productive sector by frequently introducing new taxes and levies.  Examples include the telecoms excise tax; excise duty on carbonated drinks; beverage’s tax and the NYSC levy.

He said: “The introduction of these taxes and levies are an unfortunate addition to other anti-enterprise regulations. The multiplier effects of these would further hamper the purchasing power of the citizens, reduce capacity utilisation of enterprises and worsen the macroeconomic indices in the country.

“As a matter of urgency, there should be deliberate alignment of Monetary and Fiscal Policies. The process should involve the Organised Private Sector of Nigeria (OPSN) to enhance its credibility and effectiveness, while  strict monitoring and enforcement should be ensured.”

Still faced with slow growth, non-inclusiveness and poor socio-economic conditions, the economy may plunge into further crisis, writes TOBA AGBOOLA.

THE nation’s economy has become a source of worry to many, who fear that things might get worse if urgent steps were not taken to addres the situation.

According to the Director-General, Nigeria Employers’ Consultative Association (NECA), Mr Wale Oyerinde, advised the Federal Government to employ a holistic approach to resolve the challenges.

According to him, “The nation is faced with multiple challenges. With a dire combination of spiralling inflation, rising energy costs (aviation fuel, diesel, among others), scarcity of forex, dwindling value of the naira and an almost comatose aviation sector.

“Also, with a stuttering education system, rising debt, depleting foreign reserve and rising fuel subsidy expenses among others, that threatens to lay bare the country’s economy, there is no better time for government to reappraise current economic policies and deepen its engagement with the Organised Private Sector (OPS). While the government’s effort to salvage the economy is commendable, there is, however, a need for a more holistic approach to resuscitate the stuttering economy.

“Being dependent on crude oil for about 90 per cent of its foreign exchange earnings and 80 per cent of its budgetary revenue, Nigeria has always lived dangerously on the precipice, with a major chunk of its revenue dependent on the complexities of global crude demand and supply. A dangerous blend of self-destructive tendencies, insecurity and fiscal and monetary policy inconsistencies have also conspired to make the situation worse. While revenue continues to shrink, the nation continues to dig its feet deeper into debt.”

At various international bodies, including the World Bank, International Monetary Fund (IMF) and the World Trade Organisation (WTO), Oyerinde warned against excessive borrowings by the government.

He said while some stakeholders had canvassed that the Gross Domestic Product (GDP) ratio of the country is healthy, a recent announcement by the Minister of Finance, Budget and National Planning that the revenue-to-debt service ratio is in the negative called for urgent concern.

He said: “In April, the World Bank warned that the rising cost of fuel subsidy could significantly impact public finance and pose debt sustainability concerns. Alas, this projection is almost happening. The fiscal performance report released recently by the Federal Government confirmed the accuracy of these projections. The combination of a struggling aviation sector and roads taken over by bandits have also conspired to fuel the situation, leading to rising inflation at 18.6 per cent (according to the NBS). These have continued to worsen the promotion of commerce and the increase the rate of de-industrialisation of some regions of the country.”

While recommending how to deal with the multi-face challenges, Oyerinde said a deliberate approach and wide consultation with stakeholders should commence, to harvest alternative policy options to re-energise the sectors.

“While the challenges of revenue shortage are acknowledged, burdening businesses with new taxes or levies will be counter-productive and self-destructive action.

“Over-burdening already burdened businesses will only lead to business closure and an escalation of job losses with consequential effects on our social and economic stability. The government should, in the short-term widen the tax net, reduce wastages in governance, and focus on economic projects that will stimulate the  economy and guarantee an enabling environment for businesses to operate.

“An enabling environment for local businesses will create the platform for new foreign direct investment, which could increase forex inflow.

“In the medium term, the Federal Government should  fix the four national refineries and encourage the development of modular ones as a precursor to total removal of fuel subsidy. With over N5trillion budgeted for subsidy payment in 2022, an amount larger than the budget for education and agriculture, this is unrealistic and unsustainable. Economic interventions aimed at improving living standards (to stimulate consumption) and Enterprise sustainability (to promote job creation) should be implemented. While forex scarcity persists, allocation of the available forex to manufacturing and other productive sectors should be given priority

The Centre for Promotion of Private Enterprise (CPPE) also said forex scarcity has endangered capacity to create new jobs and retain existing employment.

Invariably, the centre noted that the sharp depreciation of the exchange rate and operation of the parallel market, which is over 300 per cent due to the scarcity at the official window has worsened the profitability of investments in the first half of the year.

According to its founder/Chief Executive Officer (CEO), Dr. Muda Yusuf, many businesses had suffered serious dislocations as a consequence of foreign exchange liquidity challenges, volatility and the depreciation of the currency.

“These have severely affected businesses across all sectors. Costs of operation and production have gone up from 30 to 100 per cent as a result of the exchange rate crisis,” he said.

He noted that output have declined significantly in many industries because of the challenges of accessing raw materials due to the scarcity of foreign exchange, while many players in the economy resort to the patronage of the parallel market at very prohibitive cost, as very little access exist on the official window.

He said: “The dysfunctional foreign exchange policy has negatively impacted Foreign Direct Investment, Foreign Portfolio Investment as well as other capital inflows into the country.

“The multiple exchange rates, and huge parallel market premium in the forex market remain major downside risks to investment growth and attraction of foreign capital into the economy. These have continued to weaken the supply side of the foreign exchange market.”

Yusuf lamented that the inability of foreign investors to repatriate their profits and dividends as well as income have created great perception, reputational and country risk issues for the economy.

“All of these have been responsible for the sharp decline in the capital importation in recent years,” he said.

He listed, among others, high cost of production due to high import dependence of manufacturing sector for imported raw materials as implications of the foreign exchange crisis for the investors.

Others include high operating costs across businesses in all sectors, low sales and turnover because of the increase in price and effect on demand and erosion of profit margins because not all the additional cost can be passed on to the  consumers.

According to the CPPE chief, the economy over the past six months, was characterised by diverse economic vulnerabilities, which  include the following unprecedented surge in energy prices which had a very huge adverse effect on economic players across all sectors, unprecedented level of currency depreciation and currency volatility, increasingly weak fiscal space, acute foreign exchange scarcity with profound effects on investors across all sectors, rising public debt and debt service burden, worsening security situation and elevated political risk as a result of political transition processes.

Others were growing fuel subsidy burden, weak infrastructure, slump in investors’ confidence and depressed purchasing power.

“All these headwinds have had devastating effects on businesses in the first half of the year. However, the economy continues to demonstrate resilience amid all of these harsh investment environments,” he said.

He, however, stated that the biggest concerns of economic players in the first six months of the year was the high and increasing energy costs. “Investors across sectors  are concerned about the high and increasing energy costs, especially the cost of diesel, which has gone up by over 300 per cent, the cost of aviation fuel, which has gone up by another 300 per cent, the cost of gas which has increased by over 100 per cent. The cost of PMS is still moderately tolerable because of the subsidy regime that is still being provided by the government,” he said.

On fiscal operations, Yusuf stated that the figures released by the Finance Minister, Mrs. Zainab Ahmed, during the presentation of the 2023-2025 Medium Term Expenditure Framework, painted a gloomy and disturbing picture of the state of government finances, suggesting that the government is on the brink of bankruptcy.