Labour Minister’s directive to banks

The banking industry reacted to the economic squeeze by downsizing their staff roll in order to survive, but the Minister of Labour and Employment, Dr Chris Ngige’s “directive” for banks to suspend such actions forthwith may not be a sustainable response to it. For the banks, the full year financial results for 2015 and the interim results for first quarter of 2016 showed a massive degradation of their balance sheets and the tumbling of top and bottom lines in their profit and loss accounts. Even the Central Bank of Nigeria (CBN) recently warned of impending danger if the declines continue this year. Also, according to the Nigerian Bureau of Statistics (NBS), rising unemployment and under-employment rates came to 31.2%, with over 500,000 jobs lost in the first quarter of 2016 alone. This bodes the potential danger of social instability engulfing the entire country. The government can hardly stand the escalation of the situation. The Minister’s order appears misplaced, and at best shadow boxing, as it does not address the root causes. The macroeconomic headwinds have unhinged banks’ financial stability. The impact of the oil sector woes and the Federal Government’s poor responses to them have conspired to undermine the stability of everything in the banks, including jobs. If the CBN’s warning is anything to go by, we prefer that firmer steps should be taken to protect the banks and the financial sector to avoid a system collapse, as this would trigger horrendous economy-wide consequences. Far more jobs would be lost. We advise the Federal Government to focus more efforts on macroeconomic policies for the banking sector and to ensure that the woes of the oil industry are tackled to shore up production. The resurgence of militancy in the Niger Delta requires deft political responses beyond mere military mobilisations. The reality is that no organisation would sacrifice its survival to protect a few jobs. We expect the Federal Government to initiate dialogue with stakeholders in the banking industry to ascertain the manner of relief they require to encourage them to stem the retrenchment gale. Government should not hesitate to bring down the full weight of the law against any unjust and unlawful termination of jobs. And these measures should not only be limited to the banking industry as the statistics from both CBN and NBS indicate that job losses in the banking sector are less than 1.0% of the total job losses in the country. We are in a great economic emergency as a nation. The protection of the stability of the financial system is a task for all Nigerians, and we must all join hands to paddle the economy out of these troubled waters.

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