Nigerians have been reacting to the recent Federal Government threat to revoke the operating licenses of banks and telecommunication firms that flout its order to suspend further staff retrenchment in the wake of the country’s worsening economic climate.
Reacting to the development, an analyst with WSTC, investment bankers, Olutola Oni, said the whole question about rightsizing employees within the private sector should not be within the command of any government.
According to him, “the obligation of corporates as responsible citizens is to make their tax filings as and when due, and to conduct their businesses within the provisions of the law. In as much as employment contracts between a company and its employees do not originate from the government, it follows that a government intervention in the termination of the life of such contracts may not be necessary.”
Also in a similar vein, the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, expressed shock at the threat of the Federal Government, saying the move by banks to lay off workers remained an entirely business decision.
“We need to check the fact and basis for their decision. Remember that these are private organisations and I don’t think it is right for government to compel them on matters like this. Government could prevail on them through moral suasion.”
According to him, the best government can do under the present situation is to appeal to banks to be more humane in their management style and see whether the laying-off of workers could be moderated.
He said the decision of the banks to lay off workers was as a result of the bad state of the economy, adding that prominence was given to the story because banks were involved.
Prior to now, he said a lot of businesses, especially, those in the manufacturing sector have been laying off workers because they could not access critical inputs and other raw materials needed, which ultimately affects their profit margins.
All these challenges, according to him, ultimately affect the banking system and is already taking a toll on their operations, leading to the latest onslaught on their workforce.
Yusuf further pointed out that only the Central Bank of Nigeria (CBN) has the power to withdraw the license of any bank found wanting or have committed an infraction.
According to the Managing Director/CEO, Cowry Assets Management Limited, Mr. Johnson Chukwu, government’s threat on banks as ill-advised and unnecessary as such statements can erode customers’ and investors’ confidence in Nigerian banking system.
Meanwhile, the Senate, yesterday, summoned the Minister of Labour and Employment, Senator Chris Ngige, over his threat to sanction and withdraw licences of banks that sack their workers. The summon followed a motion of personal explanation by Chairman, Senate Committee on Banking and other Financial Institutions, Rafiu Ibrahim, on Ngige’s threat to revoke licences of banks that ignored Federal Government’s directive on retrenchments.
Ibrahim told the Senate that the Minister was widely reported to have threatened in far away Geneva, Switzerland, that banks that flouted government directive not to sack workers should expect sanction, including loss of their operating license.
He noted that any misguided statement or directive has the capacity of a throwback on the industry. He added that it should equally be appreciated that certain statement could create a run on the banks. “Without any prejudice to the position of the Minister, we want, as the Chairman, Senate Committee on Banking, Insurance and other Financial institutions, to invite the Minister, the Central Bank of Nigeria (CBN) and the banks to know if they are talking at all about retrenchment and what will happen.”