It recently took the swift and timely intervention of the Central Bank of Nigeria (CBN) to avert what would have been a massive job loss in the banking sector. Access Bank had finalised plans to lay off about 800 workers, aside slashing the salaries of others. It is, therefore, possible other banks and employers of labour would have toed the same path of retrenching their staff if Access Bank was not stopped by the apex bank.
However, the threat of job losses was long predicted at national and international levels following the economic lockdown occasioned by the coronavirus pandemic across the globe.
The Managing Director of Inter¬national Monetary Fund (IMF), Kristalina Georgieva, had rightly said: “We anticipate the worst economic fallout since the Great Depression.” Similarly, the World Trade Organization(WTO) forecast that nearly all regions of the world would suffer “double-digit decline in trade.” True to these experts’ predictions, the global economy has been bleeding, thus making retrenchment a viable option for both governments and private-sector employers of labour.
Despite the prevalent economic realities, laying off workers at a time when both individuals and nations are still nursing the wounds and smarting from the fatal blows dealt by COVID-19 is ill-timed and counter-productive. It is heartwarming and commendable that the apex bank, in synergy with the Bankers’ Committee, quickly stepped into the matter and stopped the imminent retrenchment of workers across the sectors.
Yet, the CBN needs to do more to safeguard the nation’s wobbling economy by devising initiatives similar to those taken by Central Banks and Treasury Departments of many countries in their response to the challenges posed by COVID19. In Japan, for instance, the Central Bank, last month, announced its readines to buy an unlimited government debt as well as double its purchases of corporate debts. Besides, the Japanese government rolled out a massive relief package of nearly $1tril¬lion. Other comprehensive measures include cash payment to citizens and Small Medium Enterprises (SMEs); interest-free loans; delayed tax payment and so on.
Similarly, the Central Bank of China reduced reserve requirements for banks to enable them loan an additional #80billion to struggling busi¬nesses, aside promising to cut interest rates in the months ahead, the United Kingdom Treasury pledged to pay 80 per cent of workers’ sala¬ries for several months to prevent companies from sacking their staff; offered to reimburse self-employed workers for lost wages; increased unemployment benefits; established a loan scheme for SMEs and rescue aids to charities.
In Germany where the economy is expected to shrink by between three and 10 per cent (the first time since 2009), the government has lavishly allocated a whooping €350billion to prop up the Eu¬rozone’s largest economy. Specifically, this fund is for the bailout of struggling businesses by making unlimited loans available and potentially taking equity stakes.
Given these large-scale interventions in other climes where the economies are robust and stable, it is incumbent on the CBN to raise the bar. Gladly, the N50billion Targeted Credit Facility (TCF) introduced earlier by the apex bank to provide liquidity and allow the economy stabilise is being disbursed through the Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank. This is laudable.
Beyond the directive to banks to stay action on sacking of workers, the Central Bank should put a mechanism in place to ensure strict compliance, more so that banks’ staff are barred from any form of labour unionism. The import of this is that should the banks breach the order and go ahead to sack, there is really no vibrant platform or umbrella for the hapless victims to ventilate their misfortune. That makes it imperative for CBN to enforce the order and insist on banks getting approval from it before going ahead with any retrenchment, if it becomes inevitable.
Like the examples from other economies, the CBN should consider more comprehensive stimulus package that will include interest-free loans for entrepreneurs and small -scale businesses; delay in tax payment; introduction of a more transparent social security and unemployment benefits; downward review of banks interest rates. It is only when comprehensive incentives and wholesome stimulus pack¬age are introduced that the attempt to halt massive job loss will make complete sense and achieve the desired result of stabilising the economy.
