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ESCALATING COVID-19: ‘Huge job loss, unpaid salaries loom if crisis exceeds April 15’

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Dr. Ogbeifun on COVID-19
Dr. Brown Ogbeifun

By Victor Young

As the world battles to contain coronavirus, COVID-19, pandemic, an industrial relations expert, a conciliator and former  President of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and Deputy President of Trade Union Congress of Nigeria, Dr. Brown Ogbeifun, in this interview, predicts more troubles for workers and trade unions in Nigeria if the pandemic escalates.

Excerpts:

Let me use this medium to empathize with the families of those that have fallen to the pandemic and also pray for the quick recovery of those battling the acute phases of the disease right now. Pandemics are not new to the world. What is, however, new is that we do not tend to have used the experience of the past to get the world ready for the aftermaths of pandemics, which might snowball into recessions and depressions.

Let us look at the simple scenarios playing out in the world. Economies are managed and nurtured by people. When those people are sick, they cannot offer their services. When this involves a large aspect of the populace, consumption of medical products become relatively high with abysmally low corresponding production levels in other sectors, thereby triggering a wide gap between supply and demand. Governments will evoke a lockdown, like they have done in order to curtail the spread of the disease. When this happens, people would be out of job, border closures will occur which have attendant effects on aviation, shipping and land transportation, schools, industries and productive ventures outside the health systems.

With inadequate supportive public utilities, which in our clime are almost near zero, lack of a robust system to provide the shock absorbers for the COVID 19 shocks, the economy would seriously take the hit. If the 1918 Spanish flu is anything to go by, apart from the huge and tragic human losses, experts have estimated that the COVID 19 outbreak could cost the global economy up to $3 trillion. Under the current circumstances, businesses are likely to default in their loan repayments, naira to the dollar has moved to 380/$, banks’ lending rates would drop, consumption of non-medical products would drop and so it is with the GDP.

These and many other factors could trigger economic shock which, if not addressed quickly, could also trigger a recession. It is for the above reasons that economic experts are urging governments to pump money into their economies if not, the world might witness a worse post-2008 economic meltdown. That is why a country like the United States of America shall be giving about $1,000 to her about 330 million citizens per month in addition to bailouts to manufacturers and SMEs. Hong Kong has been quoted to be giving 10,000 Hong Kong dollars ($1,287) to her citizens. Other nations are either doing the same or are releasing bailout packages that would give people spending power to help the economy.

Nigeria’s scenarios

First, Nigeria started the race against COVID-19 at a disadvantage. The Group Managing Director, GMD, of the Nigerian National Petroleum Corporation, NNPC, Mele Kyari, a few weeks ago, warned Nigerians on what to expect. He said 50 cargoes of Nigeria’s crude and over 12 LNG cargoes globally were yet to find buyers. With the drop in oil price below $30, coupled with the present oil war between Russia and Saudi Arabia, Nigeria has so many rivers to cross.

For a country that runs a monolithic oil-driven economy, dependent on dollar-driven importation of petroleum products, having scores of unsold cargoes and a price slump to about $24-$25, we need prayers and luck to overcome. Unless we come out of this earlier than mid-April, we are likely to face serious challenges funding the budget, paying salaries, having money to share by the FAAC and challenges meeting with our financial obligations locally and internationally.

These are major shocks Nigeria has to deal with. There is nothing on the horizon that provokes serious optimism, that something drastically positive will emerge before the middle of April.

ALSO READ: NNPC, Total, Aiteo 31 oil firms donate $30m to fight COVID-19 in Nigeria

World of work

There is no doubt that the world of work shall not remain the same after COVID-19. It shall have very serious implications for employment, migration, and emigration.  Already, the International Labour Organisation, ILO, preliminary report on the consequences of COVID19, predicts that no fewer than 25million jobs will be lost to the pandemic globally. Ours in Nigeria is more horrendous because we are already overburdened by unemployment and other related issues.

The sectors that will likely come out of this stronger are pharmaceutical and health manufacturing-related establishments. Aviation, oil and gas, especially the downstream sector, tourism and hospitality businesses would suffer very huge setbacks. Except the government comes to their rescue, many are likely to close shops. With a compounding poor energy mix, many companies, especially the SMEs, may not come out of COVID-19 alive. If this COVID-19 prolongs over the next one month and companies successfully experiment and succeed with the ‘work from home method’, many that have been seeking ways of reducing their structures to a lean and mean frame would now have excuses to execute their plans over a long term period.

We are likely to have more short term contracts looming, adoption of flexible working hours and working from homes, thereby reducing overheads on recurrent expenditures. All the employer needs to do is to increase the bandwidths of their communication facilities and make them available to the staff.  For the oil and gas sector, except the situation reverses soon, there are likely to be multiple redundancies, which may strain union and management relations.

Furthermore, most interactions in the workplace are likely to be reduced to electronic transmissions of information, increasing virtual meetings with the aid of video and phone conferencing. The goods and services deployed in the process of physical meetings would be automatically scrapped, thereby putting at risk those companies in that chain of businesses. Companies are likely to curtail flying or commuting in and out of stations for meetings, thereby saving costs on travels and out of station allowances, etc. Incidentally, some of these might cause breaches on already signed collective bargaining agreements. This could also cause large scale frustrations among employees who could turn against their union officials.

The union officials, in turn, make life difficult for management. All these could cumulatively become conflict stimulants which, in the end, will provoke strained relationships between labour and management. Invariably, I foresee a busier Ministry of Labour and Employment towards the third and fourth quarters of 2020. Despite the above, I also foresee opportunities in abundance. The unemployed could turn the work-from-home approach to opportunities. Many of them might latch on the approach to multitask by having streams of earning from so many sources, have close interactions and bonding with families, work according to self-motivating plans and enjoy unrestrained access to leave days.

Vanguard

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