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By Bimbola Oyesola, [email protected]
The new minimum wage of N70,000 was signed into law barely a year ago but Nigerian workers are already calling for adjustments to the new wage due to economic realities in the country. The director-general of Nigeria Employers Consultative Association (NECA), in this interview with Daily Sun during the just concluded International Labour Conference (ILC) organised by the International Labour Organization (ILO), in Geneva, Switzerland, shared the views that Nigerian workers are absolutely right to demand wages commensurate with the economic realities, but warned that the wages must also be commensurate with productivity.
He also spoke on why Nigeria must join hands with the rest of the world to formalise the informal economy, the procedures, parameters and the structures.
Oyerinde stated that Nigeria’s attendance at yearly ILC had brought industrial peace and development to the country, as core conventions have played a significant part in shaping what is happening in the workplace, and even beyond the workplace.
He dwelt further on issues of national and international interest, President Bola Ahmed Tinubu’s two years in office, social safety net, challenges in doing business in Nigeria and others.
Excerpt:
Nigerian employers’ agenda at ILC
Going forward, it’s another ILC to shape the conversation in the world of work and in the global economy, basically. For us as employers, two critical issues that we are focusing on. First is the conversation on the platform economy. The world is moving on and moving very fast. And the world of work as we know it is changing in a very rapid way, and the newest of the economies, the platform economy, is a conversation that many nations are already giving attention to. So there’s ongoing conversation on whether we should have a convention or we should have a recommendation on the platform economy. So the position of the employers is that we should have a recommendation pending when we all, the world as it were, understand what exactly we are talking about as part of the platform economy. The concept, the scope, the extent of the platform economy. So that’s one of the things we are pushing. The conversation is ongoing currently at the plenary level, at the tripartite level. And we are playing our part to shape the next, biggest economy as we have it, because it involves all the organizations that we have, the cab/e-hailing organization or any business at all that has been facilitated by technology, you know, so that’s one of the key conversation and the things we are driving.
The second part of it is informality, you know, formalizing the informal economy because it affects not only the employers, it affects the nation as a whole. So the plan is to join others to formalize them, to get procedures, to get parameters, to get structures that help us to progressively formalize the informal sector across the world. So those are key two agenda that the employer is basically pursuing at the ILC this year.
Benefits of Nigeria’s attendance at ILC
Now, there are two contexts here. The benefit to the country and then the benefit to the constituents. Now, conventions, there have been so many conventions. And conventions, naturally, or recommendations as it were, they affect your participation, your operation, or they affect the context and extent of what happens in your workplace. You will also agree with us that that without industrial peace, you can hardly talk about development, it can’t happen.
So the ILO’s foray into production of convention or agreement on conventions and we have about 10 core conventions now. Those core conventions have played a significant part in shaping what is happening in the workplace, even beyond the workplace. The last convention we had last year, Convention on Workplace Harassment and Violence, a fundamental convention that without it, you cannot imagine what would be happening within and outside the workplace. A convention on child labour, without those conventions on child labour, you actually just expose your children, which are supposed to be the future leaders of your nation, are basically exposed. The Convention on Occupational Safety is also shaping the context of health and safety.
A part of the things that is also being discussed at this conference is issue on biological hazard. So those are fundamental conversations that is shaping the context and the reality of all nations. So Nigeria have directly and indirectly benefited maximally.
Now, the second context is what is exactly each of the social partners gaining from it? What is labour’s perspective about the benefit? What is the employer’s perspective about the benefit? And what is the government perspective? So while we are there with the government perspective, now it’s for each player, employers and workers to do the analysis. How have they contributed to this conversation at the global level and now as our contribution at the global level, how have we brought down those key tiny elements to influence the workplace within the context of the local environment? So the benefits are massive, it’s just for each stakeholder, you know, to find a way to distill those benefits into their local context, their local operations.
ILC’s benefits to NECA and its members in terms of industrial relations practices
For us, we have platforms, we have an incisive number of our members also that’s attending. We run knowledge sharing sessions at the employers group. The committees meet on a regular basis where we share the reality, current realities of the workplace with them. So different platforms that we use to engage and to educate our members on the new trends, new patterns, new realities of the workplace. So for us, it’s an ongoing education. The education never stops. We will just keep engaging employers so that they can continuously align with the realities and dynamics of the workplace.
Nigeria’s rating on child labour and other conventions
Well, you are right. Nigeria was called out two, three years ago on the issue of child labour and we also know that the government is doing quite a lot to address these issues. The issue of child labour is a fundamental issue. It’s not only peculiar to Nigeria, it’s a global challenge. As long as we are not able to address the issue of poverty sufficiently, you can’t really say you eradicate the issue of child labour because the foundation of it is poverty. When the household or the parent is unable to meet the basic needs of the child for whatever reason, or the household is insufficiently equipped financially or economically to address the challenges that they face, one of the unintended consequences will be child labour. Those that are not supposed to work will find themselves in the place of work. Those that are not supposed to engage in employment will find themselves being employed. So, it’s a global challenge within the context of the economy as it were.
Having said that, have we missed the mark, as the UN said? Absolutely. Because check around the globe. Where you don’t have serious economic challenges, you have wars. Where you don’t have wars, you have different kinds of issues happening at that global level. And they all feed into the issue of child labour. But what we have done as an employer group is to continue to work with the ILO. We have a project that we call ASEL, A-S-S-E-L, ASEL, is a program that is focused specifically on child labour, on eradicating of child labour at sectoral level. We are looking at child labour at the cocoa producing areas, child labour at the mining areas. So those are areas that we are looking at. We can’t address the issue frontally because of the limited resources that the employers also have. But we are taking conscious efforts to identify sectors where child labour is predominant, which is basically the cocoa, the mining, the agricultural sectors, and creating structures where we can continuously educate our members and also address the community on the risk of child labour as it were. So for us, quite a lot has been done and a lot will continue to be done on this issue.
Other News
Update on the issue of right to strike
Well, the right to strike, the conversation is at the International Court of Justice already. There was no conclusion that employers believe that none of the conventions give an explicit right to strike. The workers believe the conventions give an intrinsic right to strike and because there was no agreement, the matter is already at the International Court of Justice for interpretation. So that is where we are, you know. We also believe national legislation across board, across different countries, have also addressed the issues of the right to strike. For Nigeria, the expectation is that before you get to the end of that procedure of that dispute procedure, the issue will have been resolved at one point or the other and there won’t be any right, any needs to go on strike. So for us, the matter is still at the International Court of Justice and we are waiting for the explanation of the ICJ to address those critical issues.
Minimum wage/inflation: push for new increase
The economic reality is true. There are two perspectives to economic realities. The worker’s perspective is regarding disposable income, increasing inflation, reduction in the value of every naira that the worker receives. Those are the perspectives of the employee. For the employer, the employer also has its own perspective to the issue of this context that I’m talking about. For the employer, interest rate is a challenge. The more the interest rate goes up, the higher the cost of funds for the employer. The more taxes the employer pays, the greater the risk for the business. So as it is, everything is driven by the economy. So while the worker is absolutely right to demand for wages commensurate with the economic realities, the wage also must also be commensurate with productivity. I think we’ve all consistently run away from the conversation on productivity. But we can’t run away from it. Productivity remains a very critical component of this conversation about wages. But has the economy reduced or done some damage to the disposable income of the worker and the household? Absolutely, yes.
Is it desirable that wages should be increased? Yes, it is desirable.
Is the employer, the private employers, in a position to increase wages beyond what it can afford? Absolutely, it cannot. But we should also note that the private sector is far, far, far above the public sector within the context of wage allocation, wage distribution, and even the issue of welfare. So I think we should give some credit to the private sector on how far they’ve done within the context of promoting the employees’ welfare and providing for the needs of the workers.
Companies relocating from Nigeria due to challenges in ease of doing business
Well, while we will commend the government for the stability we are experiencing now in the economy. A bit of stability that we found. The naira is not where we want it to be, but there has been some level of stability in the macroeconomic environment. We are hoping the stability in the macroeconomic environment will trickle down to the microeconomic environment. We see challenges with regulatory issues. We see inconsistencies in the regulatory environment. While we are happy that the tax reform bill has passed, we are hoping that it will pass into law quickly so that the economy will start benefiting from the different provisions. We are also hoping that to make businesses more competitive, those salient, critical issues will be addressed. Issues on energy costs, issues on whether we can get the value of the naira much better for the organized businesses. And generally, those are basically the key issues. Energy costs, forex, regulatory challenges, and also the issue of tax. I would believe that the tax reform bill will be addressed.
Living wage and minimum wage.
I think we should have the clarification very well. No country has living wage. It is some organizations, some MNIs, multinational organizations within those countries that are on their own promoting the concept of living wage. There is no universal definition of living wage. Even at the ILO, which is the grandfather of conversation at the international level on this issue of wages and workplace, there is no agreeable definition on living wage. What the ILO has done last year is to actually walk through a tripartite committee that has agreed on the need for us to start dealing with the issue of living wage. So there is an agreement that yes, we should look at the issue of living wage. The ILO have started some, put up some instruments and some structures to start the conversation on living wage at a tripartite level, which is the level that this utterly should happen, not one or two organizations in some countries that are multinationals then coming up with the concept and expecting the world to align with their own definition or their concept about living wage, which there has been no globally acceptable definition of living wage as it is.
But is living wage desirable? Absolutely, it is desirable. Because the reality is, the more money, and that is the simple economics for us, the more cash you have in the hands of the employees, the more disposable income the workers, the household have, the more money they have to patronize organized businesses, the more money they have to buy goods and services, which also trickles back to the organized businesses. And because it trickles back to organized businesses, the businesses will be in a position to produce more. So the more the business produces, the more the capacity of the employee also to buy, the more the potential for the business to expand, the more profit it will make, the more salary and wages it will be able to pay, and also the more its ability to create more jobs. So it’s an intertwined situation that you can’t just take away from all of us. So is a living wage or higher wages, will it benefit the employer in the medium and long term? Absolutely. Because people don’t eat money. So whatever is paid to them, whatever the extra, the more extra they have, the more they use to patronize what organized businesses is currently producing. So currently, we are aligned with the conversation about the minimum wage. With the conversation about the living wage, do we have any challenge with it? Absolutely not. But that conversation must happen at a platform that is capable and that has the structure to run it, which is the ILO structure.
Social Security Net
Well, I agree with you. Expanding social security net is quite important. In Nigeria we have the pension scheme, we have the Nigerian Social Insurance Trust Fund scheme, we think a lot can still be done. Even at the Nigerian Social Insurance scheme, the significant contributor is the private sector. So, governments should not only address the issue of social inequality by lip service, but also governments must play their part to fund their part and also protect those within the ecosystem. Are we doing very well? Absolutely not. Is there much more that can be done? Absolutely yes. A part of the things to be done, a part of the gaps that we also notice is the issue of data, you know, because you can’t run a successful social security system without adequate data, you need data.
So I think it’s part of the ongoing issues, part of the engagement that we’re currently having, and we have a focused management board at the National Social Insurance Trust Fund which we believe strongly will start creating those changes and implementing them within the shortest possible time.
Tinubu’s administration two years score card
Well, two issues, depending on what you are rating. We would rather rate from the economic perspective and you also rate from the perspective of where you are coming from. We know how the economy was before this administration came in. I think the biggest win is the stability that we have experienced in the last few months. The removal of fuel subsidy created the major shock and in reality, we have very little options than to remove the fuel subsidy because with what we have seen now and the reality that we are currently facing, and the sanity that we are seemingly experiencing in the oil sector, I think the best of the best decision was to remove the fuel subsidy. Would it have been better if government has put in some palliative, some definitive shock absorbers to enable the citizens to absorb the shock? Absolutely yes.
But the question of removing fuel subsidy is not in place. We had to. and it’s good that government have removed it.
The forex and crashing the forex and the two parallel markets, the official and the parallel market, crashing them together, having a unified forex is a good decision. We also believe is a good decision. Before now, people are buying forex at 400, 450 at the official, then they just cross over to the Bureau de Change across the street, and they sell it for 700, 800, 900 without producing anything. No economy grows like that. So unifying that process, we created some shock, but is it a direction that we should go? We think it’s a direction that we should go.
So, are some decisions, are they supposed to have been made? Yeah, it depends on your context, depends on your perspective, but on our perspective. But are we in a better place? Are we in a better place economically? We believe more can still be done to get us to where we supposed to be.
