Nigeria’s financial sector has in recent times been hit by a tsunami of job losses, with banks and other financial institutions seeking to respond to losses they made in 2015. Nigeria’s economy has hit a rocky patch, and the banks have suffered as a result. Because of the fall in profits, financial institutions have opted to cut costs by laying off thousands of workers, potentially swelling the ranks of Nigeria’s unemployed.
The numbers involved have varied. Last month, Ecobank Nigeria laid off 1,040 staff across all cadres of its staff. Similarly, First Bank of Nigeria Limited has commenced the process of reducing its workforce, aiming to shed 1,000 jobs at the end of the exercise. First City Monument Bank (FCMB) sacked over 400 while Diamond Bank let go of 200 staff following a nearly 80 percent fall in its profit for the 2015 financial year. Regardless of the difference in numbers, the effect is virtually the same: workers now perform their duties with troubled minds; there’s no telling who will get the boot next.
On Friday, the Federal Government, in an attempt to halt the retrenchment of workers in the financial institutions, ordered banks and insurance firms to suspend such activities pending the outcome of conciliatory meetings in the industry. This was made known through a statement signed by the Minister of Labour and Employment, Senator Chris Ngige. The minister stated that the action had to be taken because his office had been flooded with complaints from stakeholders in the industry about the continued layoffs in that sector.
“In this wise, all the retrenchments and redundancies done in the last four months and all proposed ones should be put on hold, pending the outcome of the proposed stakeholders’ summit for the banking, insurance and financial institutions’ employees, slated for the first week of July”, the statement read.
However, the Nigerian Employers’ Consultative Association (NECA) has rejected the order issued by the labour minister, insisting that Labour law did not empower the minister to issue such directives. Olusegun Oshinowo, the organisation’s Director General, asserted that employers had the right to hire and fire within the rules governing employment contracts and that this was not subject to ministerial directives.
“No employer would take pleasure in declaring redundant employees it had invested significant resources in developing over the years. Usually, redundancy exercises are foisted on employees on account of an unhealthy economy and the dynamics of the business, which often demands staff rationalisation”, Mr Oshinowo said.
Meanwhile, the labour minister’s directive does not appear to have been taken seriously. Reports suggest that other banks will be sacking large numbers of their employees in the coming weeks. On Monday, Skye Bank disengaged 175 workers. The bank ascribed the dismissals to the affected persons failing its appraisal exercise carried out in 2015. Until the raging tempest lashing Nigeria’s economy begins to subside, more workers in the banking sector could be shown the door as part of bank’s cost-cutting measures.