By Chukwuma Umeorah
It is not the best of time for companies operating in the chemical sector in the country and this has put a strain on the Organised labour in the industry as well.
Baring his mind on the challenges in the sector in this interview, President of Chemical and Non-Metallic Products Senior Staff Association of Nigeria (CANMPSSAN), Segun David lamented the high rate of closure of companies in the sector, while some relocated to neighbouring countries due to ease of doing business.
He speaks on how insecurity is equally impacting negatively on the existing companies financially, which impeded the companies from supporting workers at this trying period.
David expressed fear on what the future holds for the country as youths continue to leave in drove due to unemployment in the country.
The CANMPSSAN boss bares his mind on other issues of national interest which cut across the foreign exchange, the Organised Private Sector (OPS) and others.
Excerpts:
Support System to workers
In terms of resources directly, the unions are handicapped because we get the funding from the members. However, we also partner with employers, including government, to see how our members get palliatives to be able to cushion the effect of this economic hardship.
For instance, CANMPSSAN recently released a memo that all our branches should have a discussion with their employers concerning providing a certain level of palliative. We put that in place and a lot of companies have towed the line, and they are doing this already.
There are also cases where unions have some special revenue drive, like the ones that have hotels, guest houses, where they also get some funds or additional income. They use that also to support members that have special needs.
Employers supporting workers amidst economic challenges
We ask them to look at what is appropriate and convenient. But we also tell our members that they should also be considerate, it is not something that they will have to put their employers under pressure to say it has to be done.
In addition to that, we see that in recent times, when the government was coming up with certain policy to shore up or to stop certain use of some commodity, like the plastic and the rest, you see that union rose up and said, this is not the right time to begin to look at that. And I think that noise died down a little bit. That is to say that we are supporting our workers in every way, while ensuring that employers don’t arbitrarily sack anybody.
Union negotiation with employers
Each time you ask, they tell you that they too are suffering. Cost of diesel is crazy. Just last week, diesel rose to N1,800, the power is epileptic still and It’s not going to go away. The security is in shambles. You can’t confidently transport your goods or personnel from one side to the other without having to hire extra security personnel to protect them. This is biting deep into the budgets of companies. So that also will make them negotiate downwards each time.
That’s what is affecting the palliatives we asked them to provide for our members. Sometimes they bring up reasons not to give at all because it’s affecting them.
Boosting local production
First is that we need to look at alternative raw materials that we can use to give us exactly what we want in terms of producing quality goods. We also must find ways to reduce the dollarization of our economy. You can imagine that some companies in Nigeria still pay their staffs in dollars.
Yes, we source most of our raw materials from abroad and that has made us over reliant on dollars. To address this, the government should give an enabling atmosphere for Research and Development so that we can begin to find alternative raw materials.
But this can only be done by the organizations themselves or the manufacturers themselves. Government can provide the enabling atmosphere and give you all the infrastructure you need and provide security. There’s virtually nothing you want in this country that you will not get. The problem is that there is no security and there is no structure on the ground to help you get this thing well enough and at the right time, coupled with the fact that there are a lot of bureaucracy policies that tend to stop people from getting all these things.
Union collaborating with OPS to influence policies
It’s a collaborative thing, both from the aspect of the union and with the government. The TUC president Festus Osifo, having an understanding of this in a NAC meeting agreed that there should be a very strong collaboration with the federal government to be able to propose some of these solutions.
There is no economy or government in the world that feels that they can do it alone without the help of the Organized Private Sector (OPS). The OPS is very key to help government achieve this. They should partner with the organized private sector and with the labour to be able to achieve things like this. There are a lot of things that the labour will be profiling and under very good leadership like we said, with the unions, we will be able to get things out perfectly.
Performance of present administration
Well, for social infrastructure, if you follow the news, you will see that the federal government is awarding various contracts to have some social amenities upgraded or revamped, so many. And we see that it’s happening in Lagos, it’s happening in other states, it’s happening in Abuja, and they are doing that. Recently, they have awarded contracts to have some major federal roads upgraded heavily.
For instance, there’s going to be some link road from Lagos to six other states within the Southwest and the South-South. There’s already a discussion ongoing on that; that tells you that they are not being speculative.
In terms of the economy, we all know that the economy is not in good shape, this is the climax. I don’t think it will ever go worse than this if the policies they are beginning to think of, they will allow it to work. Like I said the other time, it’s one thing to have a good idea, it’s one thing to want to do something, and another thing for it to work, or for you to implement them and make them work. If they are sincere about all the policies they are rolling out and they want it to work, the economy should be able to rebound.
For instance, you see what the Central Bank of Nigeria (CBN) is doing with the Bureau de Change (BDCs), and the exchange rate. And just in a very short, short time, in the space of days, the Naira improved. However, it would be too quick to say that it is a lasting solution. I say this because in the days of the former CBN governor, Emefiele, we saw many policies that further plunged us into trouble. History has shown us that most of the time, the CBN policies are all by trial and error.
Youth Unemployment
It is unfortunate what is happening to Nigeria currently. If you go to countries around the world like US, Canada, out of every ten staffs, four of them are Nigerians. We cannot afford to continue to let our youths leave because they are the brains that we need to develop the nation. But they have to leave because of the high rate of unemployment in Nigeria. To make things worse, even with the little employment opportunities that are available, the foreign companies are bringing in their people to take this space.
I would suggest to the government, and it should be backed by law that instead of these foreign companies bringing in their people here to take these roles, the government should implement a law that mandate these jobs for Nigerians.
However, we see that the Federal government is beginning to work in that direction with the proposed policy statement that Expatriates would start paying a certain amount of levy if they must work in Nigeria. In addition to this payment, they should stick with the expatriate quota, and they should ensure that only, in literal terms, experts are brought in, not administrators or supervisors that Nigerians have the required knowledge to do.
Insecurity
Insecurity requires a multi-faceted approach as it is caused by many factors. The major reason for insecurity is unemployment, because the people indulging in these kidnapping, banditry and all sorts would not be doing so if they were gainfully employed.
Again, it is important to note that some of these kidnappings are being sponsored by some politicians and well-placed Nigerians. We see some kidnappers being arrested but none of them looks like they are spending the huge amounts of money that they collect as ransom. They do not act on their own. We need to go out and fish out those brains behind it.
They also have security information on when to strike and when not to. This means that our law enforcement agencies are also behind some of these things. Also, some of these sponsored attacks are being done to undermine this government.
A year in retrospect
It has been very challenging. Arguably, the manufacturing sector is the worst hit. We see the situation in the country, in terms of the dwindling economy. Also, we know this issue of sourcing for forex has been so terrible. And it’s been affecting all companies.
And this has drastically affected our productivity and the workforce. We have a couple of companies in the manufacturing sector, and the majority of them are in our sector; the Chemical Non-Metallic, which shut down recently and they moved their operations out of Nigeria. We’re talking about companies like PZ, companies like Procter & Gamble, we’re talking about companies like GSK Pharmaceuticals, Sanofi and many others.
You know what that means to our sector. It means that a lot of people are out of jobs. And so we’ve been in one negotiation or the other. And we practically restrained a couple of companies from going into redundancy, however, few insisted because we know that it might eventually, you know, distort their going concern if they don’t embark on it.
So, it’s been a very tough one for our sector, coupled with the fact that the inflation is biting harder, the cost of raw materials has more than tripled, not even doubled. It’s tripled. And that has consequently caused many manufacturers to increase their product prices; not because they want to make extra gain, but because they just want to keep the margin so that they don’t start running at a loss. It is one thing to say, I’m increasing price because I want to make more profit, now they are actually increasing prices, just to maintain the balance so that they don’t start selling at a loss. And knowing that most manufacturers bring in their raw materials from outside the country. The cost of transport also is something else.
Companies lost to economic challenges
Just within the industrial estate along Lagos-Ota, we used to have over 75 manufacturing companies in that area. But as we speak, there are only 30 surviving within the last five years. This means about 40 of them have closed. That tells you how dire the situation is. And this figure is for Ota axis alone, talk more of other locations across the country.
We cannot put a number on the total number of companies that have exited the country because many more are on the verge of leaving.
And clearly as these companies shut down, they are leaving a lot of workers unemployed. These workers are the ones bearing the brunt. Of course, the owners are moving out because according to a lot of people we’ve talked to, the ease of doing business in Nigeria is completely eroded.
For average Nigeria worker, they have at least 10 dependents on them. So, imagine one person losing his job, we’re talking about 10 people out there being stranded.
A typical example would be Procter and Gamble, who had over 2,000 employees and now they are out of the market. GSK, over 2,000 they are out and so on and so forth so you know what that means to the economy, coupled with the fact that the jobs are not just there coupled with the fact that that the economy is biting harder and everybody’s trying to see what they can do.
A lot of the youths or a lot of people have no choice but to want to run out of the country. Imagine a situation where you see a grown adult of over 60 years trying to leave the country; then you know there is a problem.