Bimbola Oyesola, [email protected]
The impact of the COVID-19 pandemic is more prevalent in the financial sector, with more customers subjected to hardship due to banks operating below 60 per cent capacity.
President of the Association of Senior Staff of Banks Insurance and Financial Institutions (ASSBIFFI), Oyinkan Olasanoye, in this interview with Daily Sun, lamented that the pandemic’s effect was not only on the customers but also on the sector itself, which has lost trillions of naira.
She reasoned that there have been some government policies that have also greatly affected the sector, especially in the area of foreign exchange. As far as Olasanoye, who is also the deputy president of the Trade Union Congress (TUC), is concerned, naira and the Nigerian population are still not too strong enough to leave at the mercy of unguided elements, advocating for parallel market.
She also talked about financial issues such as recapitalisation, danger associated with the operations of POS agents, threat to pension funds and others.
Financial sector during COVID-19 pandemic
The financial sector is the nerve centre of the country when it comes to economic matters. Whatever will affect the economy globally will affect the financial sector. For us, COVID-19 has had more effects with our sector but we seem to have recovered faster because while others were still enjoying, we had gone through various recessions and the fifth industrial revolution has really affected us. Because our sector had suffered before now, we are used to working with artificial intelligence, machines and technology, which had made it easier for us to recover faster. However, not that the economic situation did not affect us, up till now, it is still affecting us and Nigerians are complaining now about long queues in the banks, wastage of time, and all these are the effects of COVID-19.
How much has the sector lost to COVID-19?
The sector has lost trillions of naira through various ways. Most of the institutions took loans from foreign institutions, which they pay back, most of the time, quarterly. The time they took the loans, the exchange rate was not this bad. Repaying the loans has really affected the sector. There have been some government policies that also greatly affected the sector. For instance, some months ago, we had a policy that those sending dollars from diaspora cannot be cash it across the counter. Since they can’t send directly through such means, we have lost the benefits we should have derived in getting the money. It has also adversely affected the industry; there are no new investors, even the loans we took we have to pay more due to high exchange rate. No more investment anywhere and most of the banks’ budgets were based on the budget of Federal Government when a barrel of oil was about $50. When you quantify all these, it has really affected the sector.
Impact on workers and union’s membership
We will see more of these in 2021. My fear is, in the first quarter of 2021, more jobs may have to go. The policies government put in place to combat COVID-19 were that only 60 per cent capacity should open in the financial sector, that is why not all banks’ branches will open and for those that will open, 60 per cent of the workers must work from home. Our employers have been able to see that they need more of technology than human beings, because by the time 60 per cent were working from home they have been able to use technology from home. They have been able to see some departments that, come 2021, they may need to merge them, because those working from home and the 60 per cent that are physical in the bank have been able to do more. However, we appreciate our employers on their agreement with NECA that no worker would be laid off on account of COVID-19. That was the palliative we asked for when the Trade Union Congress of Nigeria met with Vice President Yemi Osinbajo, no layoffs, and the recapitalisation of the banks and insurance companies should be suspended. So, because of that, no worker had been laid off as at now as a result of the effects of COVID-19. However, our fear is this: before now, people were laid off after performance. Presently, Nigeria doesn’t have 100 per cent automation in the financial sector. We still have people who want to come to the banking hall to perform their transactions due to high level of scammers in the sector. Now that some branches have been locked down, it means that particular branch is not performing. Despite that we have our members working from home, there are some things you cannot perform from home. So, at the end of the day, I could see more financial sector workers being declared unproductive. That is why I earlier said that in 2021 we will have issues.
Expectations in 2021 as regards recapitalisation of banks
When we talk about recapitalisation of banks, it is more about investors in the sector. Many Nigerians have not derived any benefits when it comes to shares benefits; majority of the shares we bought all went down. Recapitalising at a time like this when there is recession and the effects COVID-19 will not benefit Nigerians, except a few super-rich Nigerians. It means fewer Nigerians will get richer while many will remain poorer. On the effects, the assistance we want from government is more on policies. Part of the problems we have in the financial sector is so many uncoordinated policies. When they roll out policies, they don’t think of the aftermath. That is the reason if you have dollars in your account, you can’t withdraw to make transactions. This is a country where we thought we wanted to increase production so we crashed interest rate; but how do you go into production when there is no electricity and necessary raw materials? We should put up policies that are citizen-friendly, then our sector would benefit from it.
Post-COVID-19 and financial institutions
Looking ahead at 2021, we are adequately prepared to negotiate on behalf of our workers. None of our members would be laid off, the secretariat will bargain for members. We will make sure that due process is followed, that our PFAs are updated, so that we have something to fall back on when we leave. However, our preparations are being affected by policies. The collective agreement we have is outdated. When companies want to lay off, our collective agreement is based on industrial sectoral collective bargaining (CB). So, where we have a CB that has not been taken into consideration amid a global pandemic, definitely, we are still going to have issues based on policies. We have tried within our capacity to call government to order and we had given ultimatum that the ministry of labour appealed to. When it comes to that time, there would be negotiations.
Threats to jobs of members with the presence of momo agents
It all still boils down to policy. With banks closing down branches, these agents have to come out to bridge the gap. But if we have our collective agreement in place, then we can find a way to unionise these agents. There will be more fraudulent practices where people refuse to control each other. Fraud level in the banks became high since banks started employing contract workers. These workers are not core professionals, they are not well trained and they don’t have ethics for the job. It is easy for them to be used as a Trojan horse, that is why they can be used as soft targets to commit financial fraud. Nigerians should be prepared to see more scams from these agents not because they lack integrity but because they are not core professionals. It will be easy for scammers to use them.
Companies converting employees to contract workers
In a country that has high unemployment and underemployment, with huge number of graduates churned out of the universities yearly without future, where a worker has over 20 dependants and you are about to lose your job and there is an opportunity for you to become a contract worker, you would definitely take it. Unionism is voluntary. It is going to be tough. That is why we prepared, early this year, we worked with some banks that, instead of laying off our members, can we have salary cut? And they accepted. We’ve been able to work with three banks this year, we have an agreement for three, six months of salary cut rather than laying off. We are looking into that again next year against laying everyone off. Because, if you have six in a department and you lay off four, the remaining two will still do the job of the six. We are already losing out on our work-life balance in the financial sector. We are well prepared that, instead of the six to go, we don’t mind having salary cut so that some of us will remain. However, we are careful with that on our employers so they don’t capitalise on it.
Nigerian Governors’ Forum’s plan to borrow loans from pensions fund
This issue is not about taking loan, but about integrity and trust. Our money is with a custodian that has the power and right to invest. If government wants to take loan, it is not from us; it is from the investors as the custodian of the money. This is not the first time we are doing something like this in Nigeria, but it is all about integrity and trust. How many loans has Federal Government taken that we have seen infrastructure or seen them being transparent about? When it comes to our funds, we talk about accountability, transparency, integrity and trust, which is lacking here in Nigeria. For us, we have our doubts based on the core value.
Insurance recapitalisation should be risk-based. What government wants is a balance of everything, it makes the capital base to be too high. The 1 per cent of gross retention government is asking from them is unfair. It should be net profit. There are intermediaries that they have already paid commission to. So, asking them a proportion of gross, it is above what they collected. On presentation made by our association through the TUC at the House of Representatives on Banking and Insurance Bills, we emphasised that there is nowhere in this bill that is put into consideration, whistleblowers and what would happen to the employees. It means the board members and directors would have had their way and the workers are not allowed to. Until we encourage and protect whistleblowers, there would still be issues in the Act.
Forex rate in Nigeria
It is still about policy. What government releases to banks today is always lesser, the supply cannot meet demand. As long as supply cannot meet demand, the policies put in place are unfriendly, we will continue to have double market, which will not help government. It is unfair to leave our naira without protection. From the way we are going, if official exchange rate is N380 per dollar and black market is N580, it is never going to be easy for us to get it at government’s exchange rate. It means there would always be people that want to shortchange the people and operate more of the black market. I think until government puts in place a parallel market, it will affect Nigerians for a very short while, but would be stabilised at the end. I want Nigeria to have a standard exchange rate. Our naira and population are not too strong enough to leave at the mercy of unguided elements.
Effective trade unionism in Nigeria
Our employers are trying as much as possible to make labour irrelevant and the situation we find ourselves in the country is also to the disadvantage of labour. An International Labour Organisation (ILO) law says, if we have issues, we should use social dialogue. The last time labour proposed strike, government called for a meeting and we had to attend to embrace social dialogue. The Labour Act is not to the advantage of industrial unions, we have tried to manage in between. For us in the financial sector, our collective agreement expired in 2007 and we are in 2020, running round to get it renewed. This is something that is contained in the National Wages Act and a convention of ILO. It is not the union that is not relevant but, these days, everything around us is squeezing life out of us. They make us look irrelevant so that it takes people who understand how the union works to want to be part of the union. They make it very tough. It is the totality of the environment that the unions finds themselves in that makes them look inefficient.
What can labour do to break the jinx?
We are trying to change the Labour Act. We are doing more of enlightenment for our members on advocacy and to get the accurate information before our employers. We are doing more of advocacy, leveraging information, more training, and everything to get our members enlightened. We have become more open to members, part of which we send to our members weekly what the labour law talks about different sectors and advocacy to know where really the problem is.
Labour losing relevance
I appeal to Nigerians to have more understanding. It is not about sellout but the situation we find ourselves in. The Labour Act specifies processes of going on strike. For civil society, there is no law that specifies the way they go on strike; so we can’t be compared. When issues of strike arise, we have to follow ILO and United Nations stand on what the law says about social dialogue. We will do more of enlightenment for Nigerians to understand what we are going through.