Many employers have relocated to neighbouring countries, says Oyerinde
The Director-General of the Nigeria Employers’ Consultative Association (NECA) Adewale Oyerinde, in this interview with GLORIA NWAFOR, talks about legacies the Buhari administration should leave behind for the private sector and how to cushion economic hardship for employees.
Following the high cost of living, employers have been urged to prioritise fair pay. As an employers’ body, what’s your take on this?
We support a fair wage for fair work done. We believe labour is not a commodity, so a worker must earn his pay. The dynamics will change when the rate of economic change like inflation will naturally erode the purchasing power of both the employer and employee.
When the minimum wage was at N30,000, the private sector was paying higher than that and the dollar then was less than N200. But now with the N30,000 minimum wage, one dollar is over N700. It has made nonsense of the minimum wage. Now, the employer that has done his budget and projection earlier in the year, but due to no fault of his, the dollar is now above N700, he still has to meet his projection for the year, demands of employees for welfare and his regulatory obligations.
Within the same context, energy cost is rising. So, while saying a fair wage is desirable, sometimes, the circumstances are beyond your control and this makes what you call a fair wage unfair in the market. But employers are desirous of paying a fair wage. We are considerate because we go to the same market. But when the environment is choky, some employers will weigh the options.
Due to the toxic operating environment, many of our employers have relocated to neighbouring countries, while some others are springing up in those countries. The goods produced will find their way back into the country.
We unnecessarily create challenges even for the Customs. After all, if the environment is conducive, we’ll produce here because we have the population. We will generate employment; pay our taxes and salaries for our workers without hitches.
The moment employers are frustrated here they go out and if they’re frustrated in bringing in their goods through the land borders, they will pass the bush path. Until we start looking at the nexus between one policy and its consequences, investors will continue to shy away from doing business in the country.
What measures should employers explore to ease financial burdens on employees?
Employers are doing a lot. A lot of welfare schemes are coming up. Employers are becoming ingenious in terms of employees’ welfare.
For instance, the Lagos-Ibadan expressway is now becoming a major challenge, so, for our employees coming from that axis, we asked them to work from home. We have also varied our working hours to reduce pressure on employees. I know many of our employers in the manufacturing industry give their products monthly to reduce pressure on employees, while some give paternity leave to mitigate these challenges.
Employers have been very creative. Though it might be challenging for most of us, we have to be creative to mitigate these challenges. It might not necessarily be in cash. Even if Artificial Intelligence (AI) is gaining ground, it is still humans that will programme and interface with them. It has been a difficult environment but employers too are living up to their responsibilities to ensure the critical elements in the business, which are the employees, survive.
What are the solutions to the country’s rising unemployment rate?
The private sector creates eight out of every 10 jobs. Two ways to tackle the issue of unemployment in the country is for government to deliberately support organised businesses. You can’t keep choking businesses with taxes and levies.
Every day, new taxes and levies spring up. By the time you sum up the percentages, you have taken up the whole of the companies’ profits. Some shareholders have taken their savings into these businesses. Government must support the real sector to thrive and give more attention to technical skills development.
NECA and Industrial Training Fund (ITF) run technical and skills development programmes, Technical, Vocational Education and Training (TVET). As being done in other climes, give people skills to be independent. If I have the skill, I probably won’t be looking for a job. There is a market for every skill. TVET is a major driver for job creation in other climes.
The ripple effects of TVET can’t be quantified. If I am in government, I will implement one or two policies that will affect our national lives, which will also make an impact in other sectors. They are critical beyond focusing on infrastructure and other challenges.
ITF/NECA collaboration has been on for over 10 years and churned out thousands of youths as graduates in over 25 skills trade areas, such as ICT, mechatronics and fashion designing, among others.
Hardly will you find any of our graduates, who come from the skills trade area without employment or have not started his/her own business, because they are equipped with critical skills the industry needs.
The 25 skills trade areas were from an analysis of the skills gap done years ago that the industry needs. Once we see that there are gaps, we train people in such areas so that as they are graduating, we have jobs for them.
We encourage the government to deepen the engagement, as we pride it as one of the best private partnership projects in the country. We should give more attention to such because it is a panacea for job creation.
What can this government do to quickly salvage the situation before May 2023?
One of the fundamental issues we have currently is revenue and at the heart of the revenue are so many other challenges. There is the unavailability of foreign exchange, poor infrastructure, oil theft and subsidy, among others.
Dealing with oil theft and subsidy within the next few months is a fundamental challenge government must confront. If the government can make the refineries work, it will reduce the amount of money the government is spending on subsidies.
If the four refineries are not working, what are the workers doing? These are fundamental questions a lot of people are shying away from asking. Nigeria being a strong member of the Organisation of the Petroleum Exporting Countries (OPEC) is the only country not refining from analysis done recently.
Spending over N6 trillion yearly on subsidies is not sustainable. These are the legacy the government can achieve before leaving office; take away fuel subsidies after fixing the refineries. The subsidy is a scam.
The Comptroller-General of the Nigeria Customs Service also confirmed this, when he raised some posers about the number of petrol Nigeria consume daily. He raised fundamental issues that portend strongly that subsidy is a scam.
Whatever rot is happening, once it is removed, those that are benefiting from it will realise that there is no more business as usual. We urge this government not to leave behind a decapitated and battered private sector. Every week and month, we hear of one new tax or the other.
We pay over 50 taxes, levies and fees across the three arms of government. How can a business survive, notwithstanding the rising energy cost, it makes the business not sustainable. Our problem to a large extent is due to self-sabotage, we are the ones sabotaging ourselves, unfortunately, it is the private sector that is bearing the brunt. Let this administration leave behind a prosperous and sustainable private sector.
What are your expectations from the next administration in terms of achieving a favourable working environment?
The private sector remains the engine room for development. Its contribution to the Gross Domestic Product (GDP) is almost absolute. The sector is critical for any country, because they create jobs, generate income for the government and promotes consumption.
The effect of one business being sustainable or holding down has a consequential effect on society. If the new administration will support the private sector, it will drive the economy out of the woods. There is a need for the political leadership to have that political will to take tough decisions.
The new government should face frontally the challenges of the private sector to reduce the high rate of unemployment. Also, this government has done more on the anti-corruption war, but we believe there is so much rot in the system that they can face squarely to put the country back on the trajectory of growth. They must also address lingering issues and deal with the rot in the educational sector.
The rot in the system goes beyond the Academic Staff Union of Universities (ASUU). We must do a holistic review of the educational system from the structural and content perspective because if we miss it holistically, the graduates that will rule and take decisions for this country will be a reflection of graduates that are being churned out.
To address the challenges that are bedevilling the country, what we want is a leader that will govern us as a nationalist in the mould of the new President of Kenya, William Ruto. Someone, who can take bold and certain decisions that may not be convenient for us in the short run, but in the long run, we are going to benefit.
On the nation’s debt profile, borrowing is not an alternative; it takes a lot of thinking to tackle it. Our constructive engagement with the next president will be on how is he going to address lingering challenges.