FG failed in dealing with economic contradictions – NECA boss

Wale Smart Oyerinde is the director-general of the Nigeria Employers Consultative Association (NECA) and member of the Governing Board of the International Labour Organisation (ILO), the employers’ representatives formed in 1957. In this interview, he spoke on the impact of the cashless policy on businesses, and how the government failed to encourage industrial activities, among […]

Wale Smart Oyerinde is the director-general of the Nigeria Employers Consultative Association (NECA) and member of the Governing Board of the International Labour Organisation (ILO), the employers’ representatives formed in 1957. In this interview, he spoke on the impact of the cashless policy on businesses, and how the government failed to encourage industrial activities, among other issues.

 

Before now, people compared your activities with those of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), are they the same?

We are not part of the NLC and TUC. We call it tripartite in the world of work because there are three parties involved – the government, which is represented by the Ministry of Labour; then Labour, which is represented by the NLC and TUC; you have the third leg, which are the employers, who are very important because without them there will be no workers.

What is the role of your association during negotiations for salaries and wages?

FG reawards e-customs project despite pending suit

FG reawards e-customs project despite pending suit

We are fundamental partners in the conversation. You can’t have that conversation without the employers as a natural phenomenon beyond the statutory creation  as there must be employers before workers and wages. So, we are a strong force in the negotiation of the national minimum wage. And at the private sector level, we are also a very strong force in the outcome of negotiations on minimum or living wage.

What is the number of companies under the NECA?

The NECA has 4,000 businesses, direct and indirect; and we have a medium of communicating and advising them. Members see this as a direct business sustainability programme.

When you need information you have a pool of businesses that share with you. It is the aggregate of all those reliefs we share with the government, along with policy options and recommendations from the perspective of operators.

This is because you cannot be creating policies without involving those it is meant for in its formulation and evaluation. For instance, when the government came up with the backward integration policy on tomato paste, it was going to ban the importation and for businesses to go back to the farms. Some businesses had gone to banks to collect loans, and one or two months down the line, another pronouncement came, that some businesses had been given waivers to import tomato pastes. What do you think would happen to the businesses that borrowed, and the challenges of bandits not allowing them access to harvest? Imagine the crisis you have put both the business owners and employees. This is what the next government can look at.

The employers’ association is not the same in other jurisdictions. For instance, in Zambia, there is a legislation that compels businesses to belong to the Zambia Federation of Employers (ZFE), but in Nigeria, it is consultative; people join when they see the value. The number continues to rise each year.

There is also the platform of the Organised Private Sector of Nigeria (OPSN) that consists of NECA, MAN, NACCIMA, NASSI and NASME. But NECA is basically the voice of business.

Do you have cases on behalf of employers in court?

Yes, we currently have six cases in the regular courts. We don’t represent organised businesses at the National Industrial Court, but we guide our members through issues at the court. On February 1 we had our first National Labour Adjudication Forum, where we brought all stakeholders in the Labour family.

We have taken some governments to court on behalf of our members. For instance, we took the Kano State Government to court on the issue of consumption tax, which we felt was part of Value Added Tax (VAT), and felt otherwise. And we got a favourable judgement. We have one case at the Supreme Court against the National Assembly.

Do you have a means of enforcing compliance with wages agreed upon by parties in negotiations?

For the public sector and nationally, when you have the National Minimum Wage Act, inherent in that law, are the enforcement mechanisms; and the Ministry of Labour is principally responsible for enforcing that law generally. The National Minimum Wage Act covers the whole country, so once you are an employer, you must comply with the contents. The law also gives responsibility to individuals; if their right is infringed, that is, if they are not paid the minimum wage, an individual can initiate an action against the employer.

But predominantly, in the private sector, what we do is collective bargaining, where the union and their employers negotiate. And everybody abides by the terms and conditions of those agreements.

While the national minimum wage is N30,000, the minimum wage in the private sector is far above that because in the private sector, collective bargaining is almost negotiated every two years, and in some instances, one year. While the ILO Convention on the National Minimum Wage expires every five years, employers in the private sector would have done two or three negotiations before the national.

How true are the accusations that some private firms don’t pay their staff well while they smile to the banks? 

If you look at the operating environment, when an individual business owner decides to operate in an environment, there are three motivations—profit, social contribution or corporate social responsibility, contribution to national growth. You can’t rule out any of these three. And when the environment becomes hostile to you, it becomes extremely difficult to meet certain responsibilities.

For you to run a successful business you need skills, and most times you have to borrow from the bank at a double-digit interest rate. The other partners you are dealing with might not have the full picture of your exposure in the context of interest rates. Now, you have borrowed N10 billion, and the owners of banks are charging you to pay at when due, the regulatory authorities are also breathing down your neck, making the environment almost inhospitable for you to operate.

When you have all these things facing you as a business owner, what do you do? An average person might see your books as per N10billion profit after tax, but have they taken a second look at those figures to ask of the interest rate? How soon are we going to liquidate those loans?

While we have some irresponsible employers, we also preach responsible enterprises that align with our view concerning decent work, provide not only minimum wage but decent wage as much as practicable and whatever is needful to make the employees human. Sometimes this environment puts you in a situation where your competitiveness is not your focus but how to just stay afloat.

Are you saying the Nigerian government doesn’t provide support to businesses as it is done elsewhere?

Absolutely. That is what we have been telling the government. Globally, it has been accepted that for every 10 jobs, the private sector creates eight. So, if you want to survive the problem of unemployment, it is no rocket science that you have to support or create an environment that would make those who can solve those issues thrive. With this you will struggle less to attract foreign direct investment because when investors know that the environment is good for investment, they will naturally bring their capital to this place.

The government will make its revenue from corporate tax, employees will pay their taxes and you also stimulate productive activities because the more people are employed, the more they are gainfully paid and the more their capacity to spend. So, it is a cycle of positive will.

From the last 60 years of your association, what is your impression of the current administration?

Nigeria has come very far from the time of struggles to the oil boom when the government said the problem of the country was not money but how to spend it. We have gone full cycle to the time where our problem is now money because the level of borrowing is quite alarming that two or three generations may be paying the debt, except there is divine intervention and our creditors decide to give us debt forgiveness.

In the last eight years, I would say the government has taken quite some positive steps. But our view is that there are still many contradictions inherent in the government, such that if they had solved those contradictions, we would have been far ahead from where we are currently.

When you talk of the issue of subsidy, why can’t we fix our refineries in three years?  An individual, Dangote, has allegedly completed his refinery in three years. These are fundamental issues.

We have failed to deal with oil theft, and we have spent N5trillion to N6trillion on subsidies. No country does that by funding consumption and corruption. If you are subsiding machinery for production and technology, those are the things that can drive the economy. But we are subsidizing consumption, inefficiency and excesses.