As the issue of nonpayment of salaries to workers by some
states of the federation continues to take a toll on the psyche of
Nigerians, the organised private sector (OPS) says development which is
occurring in many states of the federation is a threat to the national economy.
The umbrella body of employers says this is because the
purchasing power of Nigerians has been reduced and this has adverse
effects on national output.
The OPS says the public and private sectors are
contributors to the nation’s gross domestic product (GDP) in a chain of
economic and social activities with profound negative or positive impact
on the economy.
Consequently, they argue that the low purchasing power of
consumers of goods and services, resulting in lower sales of goods by
manufacturers is becoming evident in factories run by their members.
They further argue that indications are rife that
companies currently battling with absence of supportive infrastructure
amid dwindling sales and low capacity utilisation, may resort to
retrenchment of workers in order to keep afloat.
The development, they fear could worsen the present high rate of unemployment in the economy.
“Rather than keep workers without paying them, like the
governments are doing, reducndancy and retrenchment will follow,”
Olusegun Oshinowo, the director-general of Nigeria Employers’
Consultative Association (NECA) told BuinessDay in an interview, Monday,
in Lagos. NECA is the umbrella body for organised employers of labour
in the country.
According to Oshinowo, the combination of falling oil
prices, which limits accruals to the federation account, naira
devaluation, delayed and outright nonpayment of workers’ salaries by
state governments in several months is having a telling effect on the
operations of member companies , a development which he says raises
concern and requires urgent measures to arrest.
“We are not operating in silos. What affects one sector of
the economy affects the rest as well because the economy consists of a
chain of activities. Nonpayment of salaries translates to less sales of
goods and services. Less sales translates to low capacity utilisation.
Where this is happening on a sustained basis, businesses are bound to go
down. The option for companies who cannot cope is obvious. We are quite
worried about the development.”
Oshinowo said these economic realities are the reason why
the Nigerian government must stop running a mono-economy with crude oil
export accounting for over 80 percent of its foreign earnings,
especially as the country does not determine the prices of oil in the
global market.
“The Nigerian problem is nothing but inability to be
faithful to addressing the challenges already identified:
Diversification of the economy. Unfortunately, some of the things in the
past that prevented the economy from getting out of the quagmire are
still continuing today. And that is why we are worried,” Oshinowo
said.
Oshinowo who believes that the new
administration of President Mohammadu Buhari must consider the public,
which favours the privatisation of the nation’s refineries, decried that
over the years they (refineries) had remained a drainpipe on the
national treasury despite being comatose.
“I could remember vividly that former President Olusesugun
Obasanjo sold the refineries to Dangote and Otedola. But when late
President Yar’Adua came in 2007, the NNPC insisted they could turn the
refineries around in six months. They convinced the president, and he
cancelled the agreement and reversed the sale. Unfortunately, nothing
has come out of those refineries until now.
“The same scenario is playing out with the new
administration. We are now hearing that the refineries can work. And you
ask what has happened between May 29, 2015 and now, for the refineries
to work? Before this
government came in, public opinion had been in favour of privatising the
refineries. Buhari must not listen to NNPC. We believe this
administration must clear the rot. It should privatise the refineries,”
said Oshinowo
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