By Bimbola Oyesola, [email protected]
The Global audit and tax advisory firm, KPMG, last month projected that Nigeria’s unemployment rate is expected to rise to 41 percent in 2023 as compared to last year’s 38 percent. But this is despite the mass exodus of Nigerian youths in search of greener pastures abroad, which is termed ‘Japa’
Adewale-Smatt Oyerinde, the Director General of Nigeria Employers’ Consultative Association (NECA), in this interview critically looked at the issue of unemployment in relation to the ‘Japa’ syndrome noting that those leaving are Nigeria’s best hands.
He speaks on how the syndrome is a source of worry for organized businesses.
The DG also looks at the problem Organised businesses still contend with in the area of doing businesses in Nigeria despite efforts by the government to ease the burden.
The NECA boss also takes a cursory look at the nation’s overall economy, the issue of Minimum Wage and the expectation from the incoming government.
Excerpts:
‘Japa’ syndrome vs growing unemployment
When your best hands are going out in droves. I am not sure Europe, America, Canada are charitable countries. They have a good understanding of the importance of talents and they know the contribution that those individuals that are coming are going to make to that economy which is the reason why they keep opening their doors.
The conversation about aging population in Europe that needs African youths to develop its economy is a different context. This Japa Syndrome calls for concern for us as a country because our best hands, those that we can call talents, across board are leaving in droves. While we have other Nigerians that can take their place, those that are leaving remained the preferred choices even in organizations. You cannot discard such reasons with the excuse that we have a huge population or high unemployment rate and other people can join and take up those roles.
The Japa syndrome is a source of worry for organized businesses and should be a source of concern for those managing our national development plan.
Ease of doing business in Nigeria
Nigeria remains 130 out of 190 countries in the context of ease of doing business, which says a lot. We commend the Presidential Enabling Business Environment Council (PEBEC), the office of the Vice President and Nigerians that are doing all they can to ensure that ease of business rating improves significantly. However, to a large extent, we have not dealt with the dealt with the contradictions in the system. In one breath, we are saying it is important for Nigeria to increase its ease of doing business rating, the Ministry of Labour is doing its best to make sure employment is generated. We still have within the context of the same environment some government agencies, parastatal and individuals constituting bottlenecks to the growth of organized businesses.
You want the organized businesses to contribute to national development, you want the ease of doing business rating to increase, but at the same time, there are other agencies within the same government that are also frustrating the attempt by another agency to make the environment hospitable for businesses to thrive.
It is like going round in circles. If our issue is unemployment, why stifle businesses that can generate employment and instead of them expanding and becoming sustainable and competitive, they are shrinking and letting out more employees. We know that if a business is no longer sustainable, they would find a way to remain in business, and one of the ways to do so after cutting cost is to let employees go or to reduce production capacity which inturn would reduce the number of employees.
While the federal government has done a lot and is still doing a lot, some of the agencies and parastatal and ministries have not done very well in complementing the policies of the government to deal with the issue of ease of doing business. We might be doing very well on paper but in reality, it is not so.
Economy
An average Nigerian knows the real issues such as self-inflicted revenue issues, oil theft and so many issues in the context of fiscal and monetary policy. I would say the new government is fortunate because they know the problems already. They know we have revenue problems, the subsidy has to go, the issue of fixing refineries. The past three governments have spent over USD20 billion dollars on fixing refineries and turnaround maintenance. Obasnajo government spent about USD1.2 billion, Yar’ Adua-Jonathan government spent about 8.4billion and the Buhari government had spent about 1.5billion. The question is what exactly are we turning around.
If we have spent over USD11 billion in the last few years doing turnaround maintenance, is that not enough reason to sit back and deal with these issues once and for all. We need to deal with the issue of subsidy and fix the refineries. Government should be bold enough and demonstrate the political will to deal with those that have collected money and did not do anything meaningful with it.
The fiscal and monetary policy should be dealt with decisively. There must be alignment between the two. The custom from the perspective of fiscal and monetary policies must play its role of promoting trade. The monetary policy authorities must do all they can to ensure that those policies are effective. We are also engaging the incoming government to set the foundation for our economic growth.
Minimum wage
The government should be grateful to the private sector and borrow a lot of ideas from them. Before the negotiation of the minimum wage four years ago, most private sector were already paying above N30,000. Because we also have the instrumentality of collective bargaining in the private sector, it was easy for us to keep increasing wages and salaries every two years.
Fundamentally for the private sector, we are in a good place and we are still open for those negotiations. The minimum wage is a tripatite arrangement supported by ILO convention. It is a conversation that we have also been promoting that government should not wait till 2024 before they start the process of the national minimum wage. They must do all they can now to put the structure in place. It is a reality that the N30,000 of 5 years ago is abysmally low in value compared to the economic reality of today.
Okonjo-Iweala
Her antecedents speak for itself. While she was at the World Bank, she left her footmark there, then she was brought to Nigeria by president Obasanjo to play a critical role in the context of shaping the economy. Again, she left Nigeria and became the Director-General of the World Trade Organization (WTO), which speaks a lot about her pedigree, resilience and discipline. She is somebody that we are very proud of.
These and many more was what reinforced our desire to invite her. We have dropped a letter in her office in Geneva. She will be the keynote speaker and part of the dignitaries to grace the second edition of Nigeria Employers Summit which is focused on trade and non-oil export.