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Why unemployment’ll continue to rise in Nigeria — Eburajolo

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By Victor Ahiuma-Young & Kelechi Azubuike

RENOWED human resource practitioner and Group Deputy Managing Director, Kewalram Chanrai Group, Mr.Victor Eburajolo, in this interview with Labour Vanguard, examined among others, the employment situation in the country and warned that Nigeria is sitting on a keg of gunpowder.Excerpts.

EburajoloWhat is your take on the current economic situation in the country as it affects job creation and workers’ wellbeing?

First, let me say I have always held the view that any economy that is growing and is not creating jobs, and when I mean jobs, meaningful jobs; jobs you can make a career with is not growth. That growth, for me is a jobless growth and it is not a meaningful growth, let us be very frank about it.

If we are not providing employment then the impact of the growth on the economy is not getting to the grassroots. When you are not providing employment, you are virtually sitting on a keg of gunpowder because we have young men and women who are leaving universities and joining others that have left earlier without employment.

All government indices show that we are growing because we are heavily import dependent and with the devaluation of naira, the projected growth has been curtailed.  I think it has come down to about 5% from about 7.5%. The manufacturing sector is virtually gone and I am sure you must have read stories of about few surviving manufacturing companies protesting the high cost of power being supplied to them. This has created more problems. While that is going on, I read in the papers that the government has slashed electricity tariff by 50%.  How do you run an economy like that?  This is a sector that you are encouraging private investors to come in, and you want to dictate to them what they should charge for the services they are rendering.

Maybe government took advantage of the situation and the complaints of consumers like manufacturers, but I don’t think doing it by fiat is a proper way to go about it. Now you are going to discourage people that have invested in the sector and that will have a very negative impact.


How has the devaluation of the Naira affected the situation?

Because we are heavily import dependent economy, with the devaluation, a lot of companies including ours, is taking a very big heat. Imagine you have credit facility with your bank to import when the exchange rate was about 140/150 and two weeks after that, there is a serious devaluation and by the time your goods arrive at the ports, the exchange rate has gone up to about N220 or N230 to a Dollar. Where is the balance going to come from?

Of course, you have an agreement with the bank that must be honoured that is the heat every importer is taking. I am sure you are aware many importers have abandoned their cargoes at the ports. What do you expect them to do? If they clear them, by the time they pay the duties, there is no way they can break even.

So, the best they can do is cut their losses and that is why many of them are abandoning their goods at the ports. For a very long time, concerned individuals and groups have been urging the government to diversify the economy to no avail.

Today, United States is almost producing more than the oil they need even if the cost of production is slightly higher than ours, but this is a sacrifice that they make.

What has happened, import has been curtailed, the cost of oil has fallen, now we are all paying the price and yet I have not seen anything that we have put in place to address this.  How can a country continue like this? We thought they were going to fix the power sector, but the situation has worsened.

There is another area I will like to emphasize that has been neglected. There is no alignment between the economic growth of this country and the manpower that we are producing. Universities are busy opening faculties and so on, yet the economy is not aligning. In other civilized countries, the government has an arrangement with the producers of labour and at any given time they do a projection, these are the sort of people that we need in the next five years.

We have higher institutions producing textile technologies, how many textile mills are there in the country?  The ones they have produced before there is no place for them to work and yet, they are producing more.  If you go to the institutions, students are still studying Banking and Finance.

The banks are not expanding; the finance sector is not expanding and if anything, they are making more money using technology. How do you make that alignment?  In the estate where I leave, I was driving out one day and somebody selling recharge cards stopped me.

I told him I don’t use recharge card, and he said, “I want to give you my CV.” I then asked him, what did you study? He said Banking and Finance.

I am trying to rack my head to see what sector really you can point to that there is some progress going on.

I can’t see anything and unless our leaders give us a blueprint of what they are doing that is aligned to our situation, this economic growth we are talking about will just gradually fade away.

Is the devaluation not a threat to employment and job security?

Talking about job security let me first address that as a human resource, HR, practitioner. Do we really have job security today in this country? One of the things that guarantee job security of the individual is strong labour union. Today, the labour unions are virtually dead. Labour unions are strong when the economy is strong, if the economy is weak, its strength is eroded.

I was reading in the papers that some workers in Central Bank of Nigeria, CBN, who had been temporary workers for 20 years were unable to get their benefits. I said temporary workers, in a government establishment for 20 years? What is the definition of temporary staff in the labour law?  The labour law is very clear about it. By the time somebody works for you for three months, he must have a letter of employment stating his conditions of service.

Everything about the law, whether casual or temporary, should not be more than three months. Yet, we are talking about 20 years and this is what has been going on in the country.

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