Covid-19: Gloomy future for workers as employers cut jobs, salaries –Experts urge FG to rejig economy with stimulus

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By Edozie Udeojo and Joke Sani,Abuja

Barely three months after ravaging the global economy, it has finally dawned on all stakeholders that the COVID -19 pandemic has shattered the world of work across countries and employers are now disengaging and cutting workers’ salaries with reckless abandon.

At its onset, the International Labour Organisation (ILO) had warned that 25 million jobs would be lost worldwide. The global body, in the last week of April, observed that due to “the prolongation and extension of coronavirus-induced lockdown measures”, there was an increase in estimated full-time job losses to 10.5 per cent of the world’s workforce, which came down to 305 million since the beginning of 2020.

In the United States alone, about 36 million people have so far filed for unemployment benefits, the highest in decades.

The ILO also noted that the sharp decline in working hours globally due to COVID-19 meant that 1.6 billion workers in the informal economy — nearly half the global workforce — were in immediate danger of losing their livelihoods. The first month of the crisis is estimated to have resulted in a drop of 60 per cent in the income of informal workers globally, which it noted translates into a drop of 81 percent in Africa and the Americas, 21.6 percent in Asia and the Pacific, and 70 percent in Europe and Central Asia.

In Nigeria, one of the hardest hit is the media industry. According to President of the Nigeria Union of Journalists ( NUJ) Chris Isiguzo, ‘media organisations are daily being asphyxiated as a result of the economic downturn occasioned by the Covid 19 Pandemic. He lamented that the little funds available to the media houses now because of shrinking advertisements, and high cost of operations, media houses can no longer comfortably pay and offset staff salaries and emoluments.

This is in tandem with the fear expressed by ILO when it noted that more than 436 million enterprises face high risks of serious disruption, saying that these enterprises are operating in the hardest-hit economic sectors, including some 232 million in wholesale and retail, 111 million in manufacturing, 51 million in accommodation and food services, and 42 million in real estate and other business activities.

“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent,” said ILO Director-General Guy Ryder.

“For millions of workers, no income means no food, no security and no future. Millions of businesses around the world are barely breathing. They have no savings or access to credit. These are the real faces of the world of work. If we don’t help them now, these enterprises will simply perish,” he said.

Massive Job losses and Salary Cuts Looms in Nigeria

That is why Isiguzo sent an SOS to President Muhammadu Buhari last week soliciting Federal Government urgent intervention to arrest the trend, specifically by endorsing financial bailout for the media industry through the Nigerian Press Organisation (NPO) and the Broadcasting Organisation of Nigeria for privately owned media organizations.

Aside the media in Nigeria several jobs are being threatened daily. Organisations like Dangote Group, Access Bank, Sheraton Hotel, Airport Hotel, Arik Airline and others in order to stay afloat are coming up with different plans, which includes slashes in the salary of workers, staff forced to go on leave without pay, use the time spent during lockdown as annual leave or outright sack. The Dangote Group in a letter to all its staff dated 27th April, 2020 and signed by Mohan Kumar, the Director, Human Assets Management & Project Support with a heading, ‘Work Hours vis-a-vis Lockdown had stated, “This is to advise all staff that the lockdown period will be regarded as part of leave period and therefore annual leave consuming. Where any staff has exhausted his or her leave period, a commensurate amount would be deducted to cover the period. Please be suitably guided.”

The Access Bank before the intervention of the bankers committee had planned to cut down its employees by 75 percent and a pay cut of almost 40 percent downward depending on the position of the workers.

The management of Airport Hotel also directed all its staff to proceed on a three months forced leave without pay in reaction to the downturn of business due to the global ravaging COVID-19.

The management of the Airport Hotel was not only sending the workers home for the next three months without pay but has failed to pay workers their March salary despite being in business before lockdown.

In the same vein, the managements of Sheraton Hotels both in Lagos and Abuja have told the workers of the inability to pay the April salary.

On the government side, the Kaduna Government had also announced the 25 percent salary cut of senior civil servants receiving above N67,000 to provide palliatives for the vulnerable citizens affected by the COVID-19 lockdown.

The federal government at this critical period is also set to implement the

2012 Presidential Committee on Rationalisation and Restructuring of Federal Government Parastatals, Commissions and Agencies, referred to as “Oronsaye Report” which recommended the scrapping, abolition, mergers and reversion of some departments to Ministries and labour has warned that the step will lead to massive job loss.

Organised Labour Speaks

Organised Labour has often reiterated that the employers of labour have no reason to sack workers due to the ravaging COVID-19.All the trade centres, and their affiliates are unanimous in their position against workers’ salary cut or employers converting the lockdown period to annual leave for the workers.

Organised Labour at different fora warned employers of labour both in the public and private sector that it would vehemently reject plans by some employers to slash salary or convert the period of COVID-19 lockdown to annual leave.The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) believed that the Federal Government has stimulus package to support businesses in the country.

The NLC President, Ayuba Wabba and his TUC counterpart, Quadri Olaleye tasked employers of labour to stop the massive layoff of workers and cut in salaries. This is even as it has charged federal government to ensure that only employers who keep workers and do not slash salary receive the stimulus.

“We demand that the economic stimulus package by government target employers who have demonstrated iron-clad commitment to keep jobs, retain existing salaries and expand production,” the labour said

Labour posited that the current economic crisis which has been exacerbated by the COVID-19 pandemic is as a result of gross mismanagement of the Nigerian economy by successive governments.

“The continuous importation of refined petroleum products as a result of the neglect of our oil refineries, perennial distortions in our trade balance, huge patronage of foreign goods and services including medical tourism especially by public officials, dearth of a national development blueprint and appetite and widespread official corruption has brought us to this cauldron.”The Vice President, representing Africa, on the Executive Committee of IndustriAll Global Union, Issa Aremu said the pandemic shows that Labour not only creates wealth but saves and nurtures lives.

According to him, Post COVID-19, Governments and businesses must stop underrating workers but see them as partners in development. The Nigeria Employers Consultative Association (NECA), a member of the OPS however believed that Nigeria’s economic challenges gone beyond COVID-19.The NECA Director General, Timothy Olawale said Nigerian businesses were finding it difficult to compete globally given the unfavourable business environment they operated in. “With the advent of COVID-19, Government’s directives on travel bans, border closures and in-state movement restrictions have meant that businesses, regardless of size, are facing increased challenges. Businesses in the aviation, manufacturing, tourism and hospitality industries, have witness significant declines in revenue, insolvencies and job losses. Furthermore, consumers are reluctant to purchase goods and services which are considered non-essential. “The consequential effect of this current environment of uncertainty and fear, is that organisations have been forced to adopt cut cutting measures in order to remain afloat. Unfortunately, disengagement of employees and salary reduction has been some of the options Employers have had to embrace.”

The Solution

An economist and Managing Director Universal Quest Nigeria, Mr. Sotonye Anga, observed that, “ COVID-19 came and met us as a nation unprepared. It came in suddenly, we have never had any sort of preparations for a pandemic of this nature. COVID-19 has distrupted our ways of life and Nigerian economy and has really affected business.

“To come out of COVID-19, our approach to business has to change, face and live in tandem with the new reality that COVID-19 has created and to spur economic development and serious economic activities. This is not the time for government to hold back. This is the time for government to make decisive expenditure for businesses to keep their staff.”

He said businesses need to be sustained ant here have to be well directed support to businesses, is the best way to sustain economy, adding that it is not just free money, but government has to support businesses, create activities and spend.

He pointed out that government has to increase spending in the area such as of agriculture, construction, nation building, health among others, saying that it is this massive expenditure that will bring back the economic activities.

He said If Government decides to hold back money and economy, nothing will happen and that will increase crime, unemployment and there will be too much problems that the nations cannot handle.

He added: “So we need to be very serious to back our businesses, agriculture and spend more so that at the end of the day, they will more food production. We need to be more food secure at this critical period because people are hungry and they would resort to other means to keep themselves alive. We don’t need that now.

“This is the time we have land, COVID-19 is not affecting our land. We have people who can go back to the farm and produce more food. We have to be proactive. This is not of the time to be thinking not just feeling Nigeria, we have to be thinking of feeding Africa and feeding the world because there’s a depletion of food production.

People and nation’s are locked down

“We are locked down, we are not producing. So at this time, we have to fill the gap by producing what we will eat as a people and as a nation and what we have to give to the world to feed the world. That is the way we should be thinking now,” he added.

According to him, If Nigeria can be the food basket of Africa and the world, it will only be a good thing. He said there is need to be thinking in that direction to producing more food for the citizens and for the world.

For Mike Mike Eze – the CEO of Crane Securities, the government needs to pump in money into the system and there has to be palliatives here and there for the private organisations and for public institutions. “The government has to come out open for it is not a matter of sitting on the fence and blame COVID-19 for the mishap in the country as this cannot restart the economy for us. So, palliatives measures need to be taken, companies have to be assisted, monies has to be pumped into the system. We have seen the country going for loans from the IMF, World Bank and so when those loans come, they have to pump it into the system, then they can share some palliatives to institutions especially the financial institutions, the real sectors, the manufacturing companies and even the capital market. Furthermore these pallaitives have to be given to these institutions at a very affordable interest rate not the usual interest rate.

As for Mr. Kurfi Garba – the Managing Director of APT Securities, the measures they have so far taken is a good one but we want them to do it in such a way that it will also separate the opportunities accross the nation because if you make supplies of food from one particular organisation, it may not necessarily benefit the economy. There are 774 local governments and then you go into these local governments to distribute to them, what it means is that the local suppliers in each of these local governments will benefit because they will make enough profit margin and apart from margin, this is more of an additional relief to the entire system. We should not forget that most of these local suppliers are also creditors and most of them who come to them to get supplies get it on credit and so because of the lockdown, most of them ate that credit and now if they go out, they are unable to pay for the goods because they could not remit the credit they initially took.

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