For 7 years, John Balogun Davis (not real names), an MBA graduate, has gone to work in a 2nd generation bank, where his job involved client services. He was fired last week, shortly after his wife gave birth to their third child, a son.
The 29-year-old handled client services for the bank in Lagos, often doing overtime without compensation. It was a savvy job that just vanished because the economy is suddenly so stupid. He tells BDSUNDAY he is in a precarious state not because of lack of skills or knowledge but because in the Nigeria job market you get exactly one chance at success.
“That chance just slipped off my hands. If I do get a job now, I certainly won’t get the type of pay I got at the bank. It’s sad. I love this country but it certainly doesn’t take care of its educated young generation” he says.
John’s experience mirrors that of millions of working age Nigerians seeking to get that one chance brake on to corporate ladder, in a country not known for any impactful employee protections.
Known for being the first job place to dream of because of its good pay, prestige and general perception as the fastest route to the middle and upper middle class Nigeria for many young graduating Nigerians, the banking sector job cuts which seemed unthinkable is history now. The combination of the sudden correction taking place in the economy, including the withdrawal of all Federal Government’s ministries, agencies and departments money from the money deposit banks and the tight forex regime imposed by the Central Bank of Nigeria (CBN), broke many banks’ back. An estimated N500 billion was milked out of the money deposit banks when the Federal Government implemented the treasury single account (TSA), in September 2015.
Today, as most of the nation’s banks headcount is changing, branch expansion is on hold. Many, if not all, are beginning or have already outsourced a number of job functions, according to BDSUNDAY findings. Junior staff are the most hit in the melee. Tellers, drivers, support staff and even security personnel have all been shipped off to outsourcing firms. Besides, pay cut is the new order for some who fear the wrath of workers’ unions. An estimated 10, 000 jobs have so far been lost in the financial sector since Q4 2014. All of this, some senior bank executives told BDSUNDAY, is to guard against rising costs, which could in the end greatly harm their bottomline. But the truth, according to BDSUNDAY findings, is that most of the banks traded so comfortably for long on free money from the government, which consequently blurred their reasoning for creative banking. That is hurting them now.
The same scenario in the banking system is playing out across all sectors of the economy.
“The job situation is very depressingly bad,” says Issa Aremu, the general secretary of national union of textile, garment and tailoring works of Nigeria, (NUTGTWN), “and that is worsening poverty in the country. That is why I believe that President Muhammadu Buhari offers the last chance for Nigeria’s industrialisation and development,” he told BDSUNDAY.
Many small businesses have gone bust and all employees rendered jobless. The oil sector has taken some of the biggest job shaves in memory with close to 200,000 job losses between January 2014 and Q2 2015. Another 500,000 Nigerians risk job losses in telecoms sector, which was largely viewed as one very efficient captive sector, by the end of this year. The FMCG’s reported not only hundreds of thousands of job losses due to security and regulatory regimes but also losses in revenue due to fast falling purchasing income.
“Many firms in the fast-moving consumer goods (FCMG) market are sacking. There are issues with cash flow and, of course, the oil price drop. But this has been compounded by uncertainty, especially in the oil & gas sector. All these are creating confidence crisis,” says Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI).
According to Yusuf, “there is currently no liquidity in the FX market. Many firms do businesses with the foreign exchange. These firms will have no option than to lay off staff.”
According to Aremu, the textile industry in Nigeria at one point was employing about 320,000 Nigerians. “But today, the same industry employs less than 30,000 people and the factories operate below capacity or they are completely closed.”
Across the media industry, it is ‘bloody situation’ according to a senior editor of one of the biggest circulating newspapers in the country. “We are going for a 30 percent job cut as soon as we can and that will include pay cuts too. We need to stay in circulation,” he told BDSUNDAY. Our analysts estimate that at least 1,500 Nigerians have lost their jobs in the sector between May and September ending 2015.
The manufacturing sector has already shed 40,000 jobs due to challenges they face in accessing foreign exchange with which to import factory inputs, among other problems.
“Once many industries exhaust their inventory, there will likely be massive job cuts,” according to Ayo Teriba, partner, KPMG, who was speaking at a recent LCCI Industrial Group annual seminar held in Lagos.
He said for real sector players, who are mostly feeling the pinch to survive; they need to collaborate with local producers to exhaust all local supply channels as short-term measures.
Local pharmaceutical players are equally laying off in droves. Some attribute their problems to the ongoing Common External Tariff guidelines which place zero duty on finished drugs but imposed between five and 20 percent tariff on excipients and raw/packaging materials.
“Today, I have an investment of $48 million which I am about to lose,” Fidelis Ayebae, managing director/chief executive officer, Fidson Healthcare plc, told BDSUNDAY.
“The sacks will affect everybody because young people go to school and come out without jobs for years. What then will happen if pharmaceutical companies die? We do not seem to be looking at the human angle,” said Ayebae.
Okey Akpa, president, PMG-MAN, said the industry could lose N300 billion investments soon and shed hundreds of thousands of jobs.
Increasingly, Nigeria has become an advanced case study in what happens to many young men and women when an economy is grossly mismanaged and, when it depends solely on oil or on a mono export. There are now a total of 29.5 million people between ages 15 and 65 either unemployed or underemployed in the labour force, according to the National Bureau of Statistics (NBS) figure. 1.3m lost jobs in Q2 2015 alone.
Issa says it is now time for President Muhammadu Buhari to work his promise on job creation. Buhari, had shortly after he was sworn in, promised to “move as fast as we can to resuscitate the textile and mining industries, and also improve production in our agricultural sector. We cannot allow industries to close down.”
This employment numbers highlight the extremity of what happens to students who graduate in a bad labour market. Their chances of getting recruited after graduation first time diminished so significantly as the economy started to turn downward following the more than 48 percent drop in world oil prices. Most graduates now prepare themselves long before graduation for a life without employment, increasingly veering into odd jobs and unplanned career paths, at the same time incurring blank periods on their CV.
CHARLES IKE-OKOH
