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The countdown to the end of President Muhammadu Buhari’s administration may have commenced, but the organised private sector (OPS) believes that there is a lot more to be done before the government leaves in terms of economic regeneration.
The members of the OPS, who are the leading employers of labour in the country and drivers of the economy, stated that operating in Nigeria has continued to pose a big challenge.
Director-general of the Nigeria Employers’ Consultative Association (NECA), Adewale Smatt-Oyerinde, in this interview, noted that the toxic operating environment has forced many employers to relocate to neighbouring countries for survival.
He spoke on the implications of this for job creation in the country, the problem in the education sector and efforts of NECA at improving the skills sets of fresh graduates in Nigeria to make them employable and job creators.
Oyerinde looks at the rot surrounding payment of subsidy by the government and what the new government from May 29 can do differently.
Excerpts:
Legacy of Buhari’s administration
One of the fundamental issues we have currently is revenue and at the heart of the revenue challenge are many other issues that we are seeing the consequences. They are unavailability of forex, poor infrastructure, oil theft and subsidy. Dealing with oil theft and issue of subsidy within the next few months is a fundamental challenge on what the government can do. Government should deal with the challenge of oil theft and fuel subsidy. Government can make the refineries work. It will reduce the amount of money government is spending on subsidy. If the four refineries are not working what are the workers doing? These are fundamental questions a lot of persons are shying away from asking. Nigeria being a strong member of OPEC and the only country not refining from analysis done recently. Spending over N6 trillion yearly is not sustainable. These are the legacy the government can achieve before leaving office; take away fuel subsidy after fixing the refineries. Subsidy is a scam. The Comptroller-General of the Nigeria Customs Service also confirmed this, where he raised some posers on the number of barrels of oil Nigeria consume daily. He raised fundamental issues that portends strongly that subsidy is a scam. Let us look at say what N3 trillion can judiciously do for us as a nation. With three key fundamental items in the budget, are not up to N1 trillion. Whatever rot is happening, once it is removed, those that are benefiting from it will realise that there is no more business. 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, but unfortunately, it is the private sector that is bearing the brunt. Let this administration leave behind a prosperous and sustainable private sector.
Expectations for next administration
The private sector remains the engine room for development. Its contribution to the GDP is almost absolute. The sector becomes critical for any country, because they create jobs, generate income for government and promote consumption. The effect of one business being sustainable or holding down has consequential effect on many parts of the society. If the new administration will support the private sector, it will help to drive the economy out of the woods. They have to have the political will and take tough decisions. The new government should face frontally the challenges of the private sector to help reduce the high rate of unemployment. Also, this government has done more on anti-corruption war, but we believe there is so much rot in the system that we believe if they face it squarely, it will help to put the country back into trajectory of growth. They must also address lingering issues in the education sector. They need to deal with the rot in the educational sector squarely. The rot in the system goes beyond Academic Staff Union of Universities (ASUU). We must do holistic review of the educational system from the structural and content perspective, because if we miss it holistically, the products that will rule and take decisions for this country will be a reflection of products that are being churned out.
To address challenges be-devilling the country, what we want as a leader to govern us is 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 because 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 argument from the next president is how is he going to address lingering challenges?
Solution to rising unemployment rate
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. Everyday, new taxes and levies spring up. By the time you sum up the percentages you have taken up the whole of the companies profits. There are shareholders who have taken their savings into these businesses. Support the real sector to thrive and let’s give more attention to technical skills development. NECA and ITF run Technical Skills Development Project (TSDP). As being done in other climes, give people skills to be independent. If I have the skill, I probably won’t be looking for job. There is market for every skill. The TSDP is a major driver for job creation in other climes. The ripple effects of TSDP can’t be quantified. If I am government, I will implement one or two policies that will affect our national lives, which will also make 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 has 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 out of 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 was from analysis on skills gap that was 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 already have people to fill up those areas. We encourage government to deepen the engagement, as we pride it as one of the best private partnership project in the country. We should give more attention to such because it is a panacea for job creation.
Cost of living crisis
We absolutely support fair wage for a 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 minimum wage was at N30,000, the private sector was paying higher above that and dollar then was less that N200. But now with the N30,000 minimum wage, one dollar is now 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, 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, is rising energy cost. So, while saying fair wage is desirable, sometimes the circumstances is beyond your control and this makes what you call fair wage becomes unfair in the market. But employers are desirous of paying fair wage. We are considerate because we go to the same market. But when the environment is choky, some employers will weigh the last options. Due to the toxic operating environment, many of our employers have relocated to neighbouring countries. From our new research, many Nigerian industries are springing up in across neighbouring countries. The goods produced will find their way back into the country. We have it that multinationals are moving to those industries and providing them with infrastructure to ease their businesses. We just unnecessarily create challenge even for the Customs, because if the environment here is conducive, we’ll produce here because we have the population. We will generate employment, tax and income for everyone. The moment employers are frustrated here they go out and if they’re frustrated in bringing in their goods through the land borders, they’ll pass the bush path. Until we start looking at the nexus between one policy and their consequences, investors will continue to shy away from doing business in the country.
Measures employers could 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, 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 that gives their products on a monthly basis 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, but 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 it and interface with them. It’s 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 survived.
