COVID-19: Five million jobs at risk
• Massive wage cut imminent
As COVID-19, which has caused the partial lockdown of the country and a slowdown of its economy rages, there are
fears that no fewer than five million Nigerians are at risk of losing their jobs.
Many of those who are lucky to keep their jobs are also faced with the unsavoury reality of massive pay cut as the pandemic has caused a decline in revenue of businesses.
Nigerian Tribune investigations also show that federal civil servants live in fear as a result of speculation that the government is at the verge of implementing the Orosanye Report, which recommends the merging of Ministries, Departments and Agencies (MDAs).
The private sector job losses are likely to affect many sectors of the economy but would be significant in the aviation, oil and gas, financial, communication and hospitality sectors.
According to experts who spoke with the Nigerian Tribune, while the finance sector will eventually ease about 300,000 workers into the labour market, 150,000 people are likely to lose their jobs in the aviation industry, 300,000 in the oil and gas sector, 150,000 in the communication industry, 100,000 in the hospitality industry and about 4million people in the small scale/entrepreneurship sector, which is the major employer of labour in the country after the agric sector.
A survey conducted by the Lagos Chamber of Commerce and Industry (LCCI) revealed that 83 per cent of the businesses operating in the country are at the risk of being laid prostrate by the pandemic.
According to the Chamber’s President, Mrs Toki Mabogunje, the pandemic had continued to take its toll on the nation’s businesses, and in consequence, majority of business owners, in Nigeria, might be forced to cut down salaries, downsize their workforces or carry out both.
She said that the lockdown had significantly destabilized business and economic activities, especially in the informal and MSMEs space given their lack of adequate cash buffers to withstand the shock.
“Findings from our survey on the COVID-19 crisis impact on the Lagos business community revealed that 81 per cent of our respondents were ‘severely’ affected by the pandemic with the median daily revenue loss of N500, 000
“Although government has rolled out a raft of relief measures to support businesses, we observe that these packages are tilted more towards formal establishments while micro and small-scale enterprises as well as informal businesses have been largely left out.
“The outlook for the business environment is bleak. We believe that businesses will continue to grapple with devastating shock of the pandemic amid weak macro fundamentals for some time to come. We might likely see businesses downsize operations, retrench workers, slash salaries to save cost or even collapse. There is potential risk for high business mortality rate in the near term,” she added.
Mr. Adebiyi Adesuyi, a banker and Chief Executive Officer of Wealthgate Advisor, also said job losses and pay cuts have become imminent in the finance sector and others as a result of COVID-19.
While describing the intervention of the apex bank that stalled the exiting of some bank staff as a temporary relief, he lamented the inability of regulators in other sectors of the economy, to toe the Central Bank of Nigeria (CBN’s) path.
He, however, opined that while the intervention of the CBN and the Bankers’ Committee might have temporarily stopped the disengagement of staff in banks, what is not in doubt is that wages would be massively slashed.
He added, “For me, besides the nation’s financial sector, every other sector will be affected. And the instant response would be a mass retrenchment, or workers’ pay cut.
“For instance, apart from aviation, hospitality and tour sm, which, definitely are not generating any revenue for now, the seemingly lucrative transport business would also be affected.
“Remember, state borders have been shut. That means those transporters that ply interstate routes have been shut out of business. Besides, those doing intrastate, especially those in Lagos, can only operate at 60 per cent loading capacity, and what that simply means is a loss in revenue.
It is estimated that between 300,000 and 500,000 jobs in the Nigerian oil and gas industry may be on the line due to the effects of COVID-19 pandemic and high volatility of the crude oil prices ravaging the world at present.
The pandemic has resulted in the shutting down of global economies and crude oil producers and exporters are facing difficulties in selling their cargoes. These have also resulted in many cargoes remaining unsold and Nigeria unable to sell about 40 cargoes from April leading.
Speaking with the Nigerian Tribune in a telephone interview on Wednesday, the Chief Executive Officer of Radial Circle, a leading indigenous oil and gas industry service provider, Mr Ranti Omole, stated that oil companies had started laying off workers since the first quarter of 2020 due to crude price crash and a lull in the industry.
According to him, “Companies started laying off staff since the first quarter of 2020 because things have been bad
from the early days of the year. We were just hoping that projects would come on stream that will stimulate our sector. IOCs have not been doing much of exploration works, so the activities have been slow.
“And if you now understand that 80-90 per cent of all the jobs done for the oil exploration and production in Nigeria
are done by service companies, both local and international, then you realize that oil companies’ involvement in actual exploration work is less than 20 per cent. Marine vessels, the rigs, facility maintenances are mostly done by service providers.
“So, now that some contracts are being terminated, some costs are being reviewed downward, if these service companies close down, between 300,000 and 500,000 jobs will be gone.”
He argued that while the federal government is providing bailouts for other industry, attention should also be paid
to the oil and gas industry.
”Apart from members of the Petroleum Technology Association of Nigeria (PETAN) that you see, there are lots of small
size, mid-size local service providers littering Warri, Eket, Port Harcourt, Bonny etc, including community contractors all over the place in Escravos, Forcados, Bonny, etc. It is big labour chain comprising between 300,000-500,000
workers that are supporting the main oil and gas sector,” he said.
The nation’s aviation industry is also massively hit by the effects of the pandemic and the shutdown and as a result would be offloading as many as 150,000 employees. Since the outbreak of the deadly virus, most of the preventive measures taken by the different countries, including Nigeria, had been targeted at air transport which has gradually led to the shutdown of airports to flight operations and subsequently suspension of flight operations by airlines inclusive of the Nigeria’s domestic airlines.
With the suspension of operations, over 120 aircraft belonging to the domestic airlines have remained grounded across the country’s airports with over 150,000 workers with their dependents left redundant. As the situation becomes
unbearable for the airline operators, many of them have announced scary decisions which have sent the airline workers fretting with the reality dawning on them that their jobs may have ended.
Airlines like Arik, Aero,Max have openly placed their workers on indefinite leave without pay while few others have announced either 80 per cent pay cut or total job loss. It is the same story at the various agencies where the Chief Executives are under serious dilemma on how to cope with overhead cost, projects and payment of workers’ salaries.
Many of the workers who spoke with the Nigerian Tribune expressed uncertainty about their jobs and salaries as the main source of income generation for the agencies has been stalled due to the various measures taken by government to curtail the spread of the virus.
According to the International Air Transport Association (IATA), Nigeria’s airlines are at risk of losing 2.2 million overseas-bound passengers and $434 million revenue loss, if COVID-19 continues to wreak havoc.
One of the major industries adversely affected by the pandemic is the communication industry, comprising the print and electronic media as well as online platforms, public relations companies and advertising companies. All segments of the industry have suffered dwindling revenue and as a result have been pushed to the wall to either let go of some of their workers or drastically reduce wages to stay afloat.
An expert, who spoke with the Nigerian Tribune on the condition of anonymity, put the number of workers likely to be affected in the industry at 100,000.
Employees of state governments are not spared from the effects of COVID-19 as some state governments are already slashing wages of workers and political appointees, though no state government has yet announced any plan to lay off workers.
Already, Kaduna State has announced 25 per cent salary cut for its employees and 50 per cent salary slash for political appointees.
Although labour unions in the state have rejected the proposition, the governor, Mallam Nasir el Rufai, said the salary cut would stand as the workers’ donation to the state’s COVID-19 relief fund.
But while Kaduna State workers’ worry is a reduction in salaries, federal civil servants are currently in fear of loss of jobs as a result of the belief that the government is bent on implementing the Orosanye Report, which would result in merging Ministries, Department and Agencies (MDAs) and consequently sacking of workers.
This is, however, at variance with the position canvassed by President Muhammadu Buhari, who, while speaking at the 2020 Workers’ Day celebration, assured the nation’s workforce that the government would resist their retrenchment without due process as a result of the economic crisis precipitated by the outbreak of COVID-19.
But, according to the General Secretary of Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGOC), Dr. Ayo Olorunfemi, President Buhari statement does not give Nigerian workers the 100 per cent assurance that they would not be sacked in thousands, but that their sack would follow due process.
He said: “What it means is that he is going to sack. He only tells us it would follow due process and we know that the due process, if followed, would lead to many staff losing their jobs because the due process he is talking about is the principle of last in, first out and that the trade unions will negotiate their exit.
“Those are the things contained in the public service rules and the trade union act. So, it is not acceptable to us that President Buhari is saying that. It is not acceptable, it is another way of cleverly, in his usual strategy, making that statement to create an impression that he is not involved; whereas he has given them a clean bill to go ahead and start sacking workers. That is what that statement meant to us, that he has given them the go ahead to sack.”
He described this as a disaster waiting to happen, adding that going the way of workers retrenchment has serious security implications, adding that the security challenges might explode.
The SSASCGOC General Secretary said: “The economic effect of COVID-19 is no doubt negative. Nigerian workers who were before the pandemic living from hand to mouth are now worst hit. You can then imagine its effect on the informal sector particularly daily paid peasant workers. The hopelessness is so high that if care is not taken our security challenges may explode.