With the year almost drawing to a close, the job crisis which began early in the year has now reached a record high with over a million thrown into the already saturated labour market. Bukola Aroloye in this report examines the worrisome situation
It used to be that people left one job to another. But as things are now, the cyclical movement in the labour market has stopped for some time. People these days are forced to stay put at their place of employment whether they get paid or not.”
This is exactly how a concerned human resource manager in one of the top oil and gas companies described the sorry unemployment crisis in the country, which according to him, has grown from just a little wound to a festering sore.
Job loss in numbers
The number of the unemployed increased to 6,063,500, a significant 9.6 per cent from 5,533,600 recorded in first quarter, resulting in an increase in unemployment rate to 8.2 per cent in second quarter from 7.5 per cent in Q1 according to the NBS.
Oil sector
The Nation can authoritatively report that following the persistent fall in oil prices, the nation’s oil and gas companies have reduced their direct and indirect jobs by about 120,000.
Confirming this development, the immediate past National Industrial Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, Hyginus Onuegbu, said the precarious job crisis has hit the oil and gas sector for real.
According to Onuegbu, who is also the Rivers State Chairman, Trade Union Congress of Nigeria, the dwindling oil prices had affected the expected revenue of oil companies in the country as revealed by their third quarter reports, with some of them declaring losses.
Onuegbu said: “The sector and the economy have seen unprecedented number of job losses, some 120,000 direct and indirect jobs have been lost in the Nigerian oil and gas sector, as companies and organisations struggle to keep afloat in the midst of pressures from international crude oil price and Nigeria’s inability to make needed reforms, especially the passage of the Petroleum Industry Bill, diversification of the economy and stoppage of crude oil theft.”
On the global scene, Onuegbu opined that the fall in oil prices had so far claimed more than 200,000 jobs.
He stated that Schlumberger SLB had retrenched more than 20,000 oilfield service workers just as Halliburton had fired 18,000 workers with Weatherford International cutting 14,000 jobs. Baker Hughes BHI cut 13,000 jobs and Royal Dutch Shell slashed 7,000 jobs.
While making reference to global reports of job cuts, he said, “The British Broadcasting Corporation reported on September 9, 2015 that the contraction of Britain’s offshore oil sector had already stripped out 65,000 jobs and that the cuts came as operating expenditure on existing assets was slashed.”
Onuegbu further observed that USA in March 31, 2015 reported that “planned oil industry layoffs in the United States are approaching 100,000 in the past four months, from December 2014 to March 2015, with more likely to come.”
According to him, the job losses in the sector are worsened by the existing challenges in the industry that has yet to be addressed by the government and other stakeholders.
The TUC boss highlighted the challenges as unabated pipeline vandalism, illegal crude oil diversion, insecurity and kidnapping in the Niger Delta, leading to significant increase in the cost of doing business.
Besides, he said the federal government’s inability or refusal to fund the joint venture budgets and expenditure had stalled ongoing oil and gas projects and operations thereby resulting in huge cash call arrears and the delay in the passage of the PIB.
Manufacturing sector
The federal government’s drive to create jobs for millions of unemployed Nigerians may have suffered a huge setback following the Central Bank of Nigeria’s recent directive excluding some essential raw materials from the list of items valid for the Nigerian Foreign Exchange markets.
To business analysts, this move, may have led to layoff of over 40, 000 Nigerians who work in the manufacturing sector.
It will be recalled that the CBN recently excluded some essential raw materials from the list of items valid for forex.
According to the CBN, the policy is intended to sustain the stability of the foreign exchange market, “resuscitate local manufacturing” and change the structure of the economy.
Reacting on the looming danger as a result of the policy, president, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, said most manufacturers might be forced to shut down and move their operations to neighbouring countries for business activities due to their inability to access foreign exchange for raw materials and other critical inputs.
This, he believes, would lead to massive job loss in the manufacturing sector.
“There is pressure on manufacturers to lay off their workforce before the end of the year. Most manufacturers affected have been unable to produce lately due to lack of foreign exchange, delays in the processing of Form ‘M’ to import raw materials in order to meet demands and this has adversely led to loss of market share. With this continuing, massive job loss is anticipated in no time from now,” he said.
According to IndexMundi, a data portal, the domestic palm oil produced totalled 930,000 MT in 2014, while the consumption of palm oil in Nigeria amounts to 2.0 million MT per annum in exclusion of the manufacturing sector.
The official figures states that the shortage in oil palm industry is estimated to be around 1.07 million MT annually.
This poses a very precarious situation for the manufacturing sector that depends largely on CPO as a major source of raw material. If this shortage is not filled with importation of high quality food grade palm oil, the economy will lose further investment in the manufacturing sector as companies would shut down and subsequently downsize.
The LCCI president further lamented that for an economy that is largely driven by the private sector, the government should source for alternative means rather than resorting to a total exclusion of certain items from the foreign exchange market.
He, however, urged the government to prevail on the CBN to review the policy in the interest of the workforce, the private sector and the economy at large.
Printing sector
President of Chartered Institute of Professional Printers of Nigeria (CIPPON), Alhaji Mohammed Lawal, has said the institute and employers of labour in the printing industry were worried over the negative impact of the harsh economic situation in the country on the industry.
He said the development had led to job losses in recent times, saying while printing is reputed to be one of the highest employers of labour in Nigeria, printers’ fate is now worsened by lack of patronage by most tiers of government as well as lack of enforcement of laws protecting local printers.
Lawal told journalists in Lagos that employers of labour in the printing sub-sector need support from all tiers of government in order to encourage investment and grow the business.
He said the economy of a country cannot be buoyant and stable if employers of labour in the printing industry are not provided with an enabling environment to manage their investment, adding that the inability to enforce the provisions of the law will also make the environment not conducive for investment.
“Nigeria could be industrialised through printing if government strictly complies with the provisions of the law on patronage to local printers,” he said.
Damning statistics
The country’s labour market has taken a major hit with worsening unemployment recorded in the second quarter of 2015 just as about 1, 317,700 Nigerians lost their jobs within the period.
Amidst this development, National Bureau of Statistics (NBS), in its latest labour market report, said economically active population or working age population (persons within ages 15-64) increased to 103.5 million in Q2, 2015 from 102.8 million in Q1.
According to NBS, the drop in the number of full employment (those working less than 40 hours per week) despite a rise in the labour force can be attributed more to job losses or previously fully employed persons choosing or being forced to work part-time or in underemployment.
The NBS report also indicated that unemployment and underemployment was higher for women than men in Q2 2015.
While 9.6 per cent of women in the labour force (those between 15-65 willing, able and actively working or searching for work) were unemployed in Q2 2015, another 21.6 per cent of them in the labour force were underemployed during the period under review.
The Bureau explained that the economically active population or working age, comprising persons within the age range of 15 to 64, increased to 103.5 million in the second quarter (Q2), up from 102.8 million in the first quarter.
This was as it disclosed that the labour force population, comprising those within the working age, who are willing, able and actively looking for work, increased to 74.0 million in Q2 from 73.4 million in Q1, indicating an increase in the labour force by 0.81 per cent.
According to the highlights of the NBS Unemployment and Underemployment Watch for first quarter of this year, there were a total of 17.7 million people between ages 15 and 65 either unemployed or underemployed in the labour force in Q1 2015.
The report further stated that: “The fact that the number of people that became unemployed (861,110 people) in the first quarter 2015 exceed the number of people that entered the labour force within the same period (504,596 persons) is an indication that some persons previously working in full employment lost their jobs while others previously underemployed and doing temporary, or part time work ended whatever they were doing and accordingly now didn’t have anything to do for at least 20 hours a week during the reference period.”
However, it noted that unemployment and underemployment was more pronounced in women than their male counterpart in Q1 2015.
As Nigerians groan under the weight of unemployment it is hoped that the newly constituted Ministry of Labour and Employment headed by Dr. Chris Ngige will do everything humanly possible to mitigate the unemployment crisis.
