IFE OGUNFUWA examines the impact of the economic recession on jobs in key sectors of the economy in the last 16 months since President Muhammadu Buhari came on board
Economic and human resources experts have said that the rising rate of unemployment will persist in the country in the foreseeable future due to the current parlous state of the economy.
According to them, the combination of poor economic policies, deteriorating infrastructure and non-conducive business environment are a major drawback to the efforts of the government and the private sector to create jobs.
The Chartered Institute of Personnel Management recently conducted a study on the state of unemployment in the country and discovered that the massive jobs losses in recent times had been induced by economic recession.
The Chairman of CIPM’s Management of National Unemployment Challenge Committee, Dr. Musa Rabiu, noted that the high level of job losses (4,580,602) reported by the National Bureau of Statistics for the second quarter of this year was a sad manifestation of the state of the Nigerian economy.
According to him, recession, which is one of the four stages of a market economy trade cycle, is characterised by resource underutilisation and income reduction.
He added that the recession was an indication of a loss of confidence in the economy by investors.
Rabiu said, “The job losses reported by NBS make the resolution of national unemployment more challenging in the short term. The confidence of the investors can be restored if the Federal Government and other tiers of government implement the planned capital expenditure items in the 2016 budget.
He added, “First, the Federal Government should release the capital votes to stimulate job creation, particularly for the ministries of Works, Power and Housing, and Agriculture. The Ministry of Budget and National Planning should report monthly figures on jobs created through capital expenditure. We should count how many jobs are being created due to the 2016 budget in addition to counting job losses.
“Second, the government should release immediately the multibillion naira supplementary capital expenditure voted for the economic empowerment of women, youths, artisans and other economic agents in the informal sector. It should also accelerate the implementation of policies to stimulate local production, in particular the textile and food and beverage manufacturing industries. The CIPM is prepared to partner other key stakeholders to find and implement solutions to the national unemployment in Nigeria.”
The Director-General, Nigeria Employers’ Consultative Association, Mr. Olusegun Oshinowo, said massive jobs losses since the new government came into power had led to low purchasing power and slow economic growth.
According to him, training the youth in vocational skills is not the solution, because they will remain unemployed as long as the business environment is not conducive.
He said, “When we have an economy with high unemployment, it will affect consumer expenditure, which is a key variable in growing the economy. The higher the rate of unemployment, the more susceptible your consumer expenditure will be.”
Oshinowo added, “Giving the magnitude of unemployment in this country, there has to be pervasive development and good governance to fundamentally address the issue of unemployment. Addressing unemployment will go beyond giving our youths technical and vocational education; our industries and sectors must be healthy.
“It is the industries that create jobs. If the environment is not enabling for entrepreneurs to create wealth, no matter the technical and vocational skills you give your youths, they will still end up in the unemployment market.”
The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said that there was a strong relationship between the recent job losses and the country’s economic performance.
To reverse the trend of massive job losses, he called on the government to review its economic policies in order to attract foreign investors.
Yusuf said, “The job losses can be reversed but we may not be able to reverse it completely. Job creation has a strong correlation with economic recovery itself. If we take steps to ensure that the economy recovers, then jobs will be created.
“When we get our policies and priorities right in terms of expenditure, monetary, fiscal and trade, and foreign exchange policies, we can be sure of some recovery. We need policies that will engender investor confidence; once we have that, I think we can get some results in terms of stemming the tide of job losses. Of course, it is going to be gradual, but that is the way to go in Nigeria.”
Massive job losses have been recorded in different sectors of the economy since the new government came into power on May 29, 2015.
Data from the National Bureau of Statistics showed that there has been a steady rise in job losses between July 2015 and June this year.
A breakdown of the Nigeria’s labour market statistics provided by the NBS indicates that 7,518,000 people were unemployed between July and September 2015, with the number rising to 8,036,100 in December of the same year.
From January to March 2016, the report stated that the number of unemployed in the country rose to 9,485,300 and by June, the figure had perched at 10,644,000.
Further analysis of the NBS report indicated that between July and December 2015, about 518,000 previously employed persons became unemployed, a figure which rose to 1,449,200 in March 2016, while about 1,158,700 people had lost their jobs by June of the same.
Since President Buhari came into power 16 months ago, the plight of workers in key industries such as iron and steel, power, financial services, food and beverages, construction and aviation has worsened.
Findings revealed that in the iron and steel sector, many companies, including three steel firms, had suspended operations and laid-off workers between last year and now, while others had reduced their staff strength due to low capacity utilisation.
Due to the scarcity of forex to import raw materials, lack of market for finished products and epileptic power supply, it was gathered that about 2,150 workers had been out of jobs in the iron and steel industry in the last one year.
Across board, it was learnt that employers had refused to negotiate the statutory conditions of service with labour unions and put on hold promotion exercises.
The President, Iron and Steel Senior Staff Association of Nigeria, Mr. Titus Orimijupa, said, while explaining the ordeal of workers in the sector, “The various management are reluctant to negotiate new conditions of service and also increase salaries. Some people ought to have been promoted or salaries ought to have been increased but they have not been increased.
“Some are supposed to be negotiated every two years. The conditions of service have expired in some companies, but the negotiations have not progressed because of the current situation in the country.”
As reported by the National Union of Civil Engineering, Construction and Furniture Wood Workers, the construction sector, one of the leading employers of labour in the country, over 70,000 jobs were lost to the economic downturn in 2015.
Similarly, the Association of Food, Beverage and Tobacco Employers, in its annual report, said that about 310 people were thrown out of employment in 2015, while the Food, Beverage and Tobacco Senior Staff Association reported the loss of 405 jobs at the beginning of this year.
For the power sector, which has been faced with massive retrenchment after its privatisation, the General Secretary, National Union of Electricity Employees, Joseph Ajaero, said that since the administration of President Buhari came into power, about 5,000 workers had become unemployed across the electricity generation and distribution companies.
According to him, allowances of workers have been slashed in many companies and some workers have been retrenched, leaving few people to carry out the enormous task of supplying electricity to homes and industries.
Since the beginning of this year, Ecobank has reduced its workforce by a reported figure of 1,040, which the lender says is exaggerated without giving the actual number; Skye Bank sacked 175 workers, Zenith Bank, 1,200; Diamond Bank, 200; and recently, Unity Bank laid off 215 workers, making a total of 2,150 jobs affected in the sector.
The crisis in the aviation sector has led to the retrenchment of 2,000 workers and more are on the verge of losing their jobs, according to the General Secretary of the National Union of Air Transport Employees, Mr. Olayinka Abioye.
First Nation, Arik Air and Aero Contractors suspended operations in the past few weeks, citing poor economy, problem with insurance renewal and high cost of doing business as reasons for the strategic business decision. Arik, however, resumed normal operations 24 hours after.