WORRIED by the spate of retrenchment that recently hit the banking sector, Labour and Employment Minister, Dr Chris Ngige, recently got emotive, ordered the banks to discontinue the exercise and threatened that the Federal Government would withdraw the licences of banks and other financial institutions that failed to reverse the retrenchment of their staff.
All over the world, citizens’ job loss distresses those in government for the simple reason that rising unemployment can precipitate social upheavals which no government ever wishes to experience. It is for this reason that governments at all levels try their utmost to ensure that unemployment is kept at the lowest level every time. However, in spite of this, they never threaten to put out of business those who offer their citizens employment opportunities. But that is the route Minister Ngige said the government would travel by threatening that the licences of those banks that fail to reverse themselves on the disengagement of their staff would be withdrawn. If the government goes ahead with this threat would it improve or worsen the unemployment situation in the country?
We find it intriguing that the Labour Minister showed so much concern about retrenchment in the banking industry but has not agonized about the same exercise in other industries. According to Mr Lateef Oyelekan, President, National Union of Food, Beverage and Tobacco Employees (NUFBTE), about two million of his members lost their jobs to retrenchment between 2015 and April this year. But Minister Ngige did not threaten fire and brimstone on those companies that let go of their employees. Is the Minister suggesting that those who work in banks are of more importance than those who work in food processing companies?
Many manufacturing companies have laid off many of their staff without the government issuing any ultimatum to them to retrace their steps or threaten to withdraw their operating licences. The Federal Government has said that the Ministry of Interior is overstaffed, when the government decides to disengage some of those staff will it also put the Ministry under lock and key? Shell recently disengaged about 25,000 of its staff globally but no government threatened to stop the company’s operations in its country.
The point here is that staff restructuring is a function of many factors. The fact that may not be too obvious to the Minister is that no company worth its salt lays off its staff whimsically. Considering the investment many of these companies put into staff development, asking them to go is usually a difficult decision to make.
Pray, would the banks have embarked on the sacking spree if they were running profitable businesses? When banks spend so much money on diesel to power their generators, would it not dip their profits? When banks are beleaguered by non-performing loans will their bottom line not be affected? When banks are bolstered by illiquidity occasioned by adverse fiscal and monetary policies, how will their operations be profitable? If the inflation rate is higher than the lending rate, how will banks not find it difficult to stay afloat? Now, when banks are running at a loss or making abysmally low profit, will they not be forced to shed operational cost? If scaling down cost results in laying off some of the workers can the banks really be crucified for that?
Minister Ngige needs to be reminded that government exists to solve problems, not compound them. Instead of issuing threats that are not worth the papers on which they are written, what the government should do is reflect on the situation that resulted in the banks turning out poor results, which forced them to downsize their workforce, and put measures in place to engender a better operational environment. Then, those in government should be wary of being found guilty of making unguarded statements which could discourage investors. Since banks are not government agencies, we are at a loss where the Minister derived the power to instruct them on how to conduct their internal affairs from. By meddling in management issues of the banks, what kind of signal does the Minister send to those who may be considering investing their money in the country? Will they not have another thought about putting their money in a country where government policies are at the whims and caprices of government officials?
Minister Ngige should note that governance is not about grandstanding and neither is it about playing to the gallery. The sooner the Minister gets to the real issue of governance, the less his chances of issuing threats that are less than paperweight.
