Between Ngige and banks
By Daily Trust | Publish Date: Jun 16 2016.
Minister of Labour and Productivity Senator Chris Ngige has been pitched against top corporate circles in the country following his attempt to stop banks from retrenching workers due to the economic down turn in the country. The Minister cited the spate of petitions and complaints by stakeholders in the sector, who complained of lack of due process in the retrenchment exercises.
The affected banks on their part justified their action by citing declining business activity on account of government’s belt tightening policies, in particular the Treasury Single Account (TSA) policy which drained more than a trillion naira in easy money from the banks. The minister had earlier “directed” banks not to retrench any workers and when some of them defied him and went ahead, he threatened them with sanctions including the possible revocation of their banking licences.
Oshinowo blamed redundancy on harsh economic measures in an unhealthy economy. He said it is an inalienable right of an employer to determine the optimal staff strength that will sustain an enterprise, and the prerogative for such action is unchallenged by any external power including the Minister of Labour and Productivity. We appreciate the Labour Minister’s concern that laying off workers by the banks will worsen the already very high level of unemployment in the country. Yet, he clearly has no powers to stop banks from retrenching their workers if they so decide to do so. All the major banks were once owned by the Federal Government but they were all privatized over two decades ago. The arrogant manner in which Ngige went about issuing the directive and threatening the banks was a throwback to another era of dictatorship and full government ownership. Even in the military era, no minister took it upon himself to direct the private sector on how many workers it must employ. These days it is obvious to everyone that the national economy is in doldrums.
Like all Nigerians we are sad that banks want to retrench workers. The banks are roundly accused of greed, selfishness and sometimes even criminal activity such as forex round tripping. Still, government officials
should not lightly trample on the private sector’s prerogatives. If Ngige’s concern is that some banks did not follow due process in sacking their workers, there are mechanisms through which workers can seek redress. If that fails, labour unions and the courts are there. The minister too can intervene to help sort out knotty labour issues but he must do so with tact and wisdom, not by threats. The threat to revoke bank licenses is empty at best because that will compound the economy’s woes.
It is noteworthy that the banks are retrenching precisely when the Federal Government has accumulated unprecedented stock of money in excess of N3 trillion, which is effectively lying idle. The Central Bank of Nigeria’s [CBN] Monetary Policy Committee [MPC] recently questioned the pace and extent of government’s intervention in the economy and passed an unfavourable verdict. Government should engage the banks so that they together arrive at a solution, instead of sabre rattling against private businesses that are bearing the brunt of its errors of omission and commission.