Sunday Olushola Salako is the National President of Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI). In this interview with TOBA AGBOOLA, he says the oil price slump is taking its toll on workers and the economy. To address the problem, the government, according to him, should focus on agriculture and small and medium enterprises (SMEs) growth.
Many financial experts are canvassing for diversification of the economy in the face of the falling oil price. What is your position?
There is no doubt that agriculture, small and medium enterprises (SMEs) are supposed to be crucial sectors of our economy. They are pivotal to building a self-sustaining economy. But much has not been achieved in this regard. Although much has been said and many schemes have been put in place by the Federal Government over the years, I do not want to speak of past failures, neither will I speak on grand propositions that were never put to practice. Rather, I would like to speak plainly and frankly on the need to urgently and aggressively pay more attention to agriculture.
To the best of my knowledge, fixing the challenges of agriculture and setting in motion a process for the creation of more robust agro-allied and SMEs, are the most important steps that must be taken by the government. This is also a holistic measure in establishing a lasting solution to the burgeoning unemployment plague. In other words, significant phrases such as self-sustenance and autonomous development, will not be used for Nigeria’s economy except we have citizens that are gainfully employed, and are productive. And the only segments of the economy that can help the government accomplish these objectives are agriculture and small scale enterprises.
History has shown that these steps were taken by many developed countries in the past and they worked for them. For instance, this is what Japan did many years ago and through proper implementation, Japan’s industrialisation aspiration was achieved. Other countries such as Singapore, Brazil, India, and Malaysia keyed into the same policy and it did magic for their economies. I am also of the view that if there is any country that has such capabilities and human resources, it is Nigeria because the current statistics showed that there are about 10 million unemployed Nigerians. This is because if labour and capital form the basic requirements for the agriculture and SMEs sector, then we are already half way through to addressing our challenge.
What can be done to enhance agriculture and the SMEs sector?
Nigeria has come a long way, and agriculture was the mainstay of our economy. But it is unfortunate that agriculture is currently playing a less significant role and the potentials in it have been lost. The sector, at the moment, cannot meet up with the early day successes. For instance, the workforce in the sector has now aged. Recent research revealed that the average age of the workforce in the agriculture sector is between 62 and 65 years. I am of the view that to revitalise this sector, resources should be channelled to areas that can benefit the country through exportation and creating jobs should be the focus. More youths should be encouraged to go into these two sectors. Fundamentally, there is an urgent need for Nigeria to seek ways to not only develop primary agriculture, that is, cultivation of crops and animal husbandry, but also develop other agro-allied businesses such as post-harvest handling/transportation and processing to transform the economy.
There is no better time for us to start than now. We all remember the promises of our political leaders, so we should hold them accountable for them. They must be able to do as they have promised and that should be now. I say this because as a labour leader, no matter how much we desire a change and no matter how many plans individuals make to build these two crucial sectors, the government has a huge role to play for those plans to come into fruition. The government must first create an enabling environment where businesses, no matter how small, are given the chance to thrive in order to help boost a market where competitive trade is encouraged.
Will well implemented government policies redirect the economic sustainability?
Yes. This, of course, has to do with government policies, processes, and projects. It has to do with trade boosting concessions, export subsidies, especially on agricultural products and the repositioning of relevant government agencies to ensure that these numerous agencies with varying competences are put to work. I am of the view that a well thought out plan ought to seek ways to boost the agricultural sector in at least, four dimensions: primary food/cash crop production and animal husbandry; food preservation, storage, processing and manufacturing; research and extension services and engineering operations, would do the magic.
Is it only through ‘reliable government policies in these sectors’that women and youths can be empowered?
Yes. I would like to also point out that exploiting the strengths that we have in these two important sectors would present an ample opportunity, not only in increasing youths participation in the building of the economy, but in opening more doors for more women to take the informal skills, which they may already have to a more professional level. It may be safe to say that agriculture and agro-allied sector boast of an equal spread of women and men, albeit in an informal arrangement, because there is a large percentage of female participation in the works and building capacities to bring about an upscale to a more professional level, will not be far-fetched.
What is the way out of the economic woods?
We want to respectfully appeal to governments at all levels to reduce Nigeria’s dependence on crude oil through diversification of their economies from oil/gas to agricultural, manufacturing, industrial and other labour intensive sectors. This is because the oil and gas sector is an enclave sector; it is very capital intensive, and its contribution to overall employment is minimal. We should also be courageous enough to review our system of fiscal federalism such that state and local governments would be motivated to grow their economies in their areas of comparative advantage.There is also the urgent need for a holistic approach to the power sector problems including the consideration of other sources of energy. Also, the state governments should be encouraged to embark on the provision of electricity as service to their people.
Jos, in Plateau State for instance, once had its own electricity generating company that provided uninterrupted power supply for years until it was taken over by the then National Electric Power Authority (NEPA). The private sector should also be encouraged to participate in power generation and distribution at reasonable margin. The success story of Bonny Utilities Company (BUC), which has provided some 95 per cent uninterrupted power supply since its inception to communities in Bonny in Rivers State, should be replicated. This holistic approach to solving the power sector problem in Nigeria should include the progressive review of all legislations militating against efficient and effective power generation and distribution.
In addition, government at all levels should expedite actions in resuscitating ailing/comatose government owned industries and companies through Public/Private Partnership in such a way that these companies/industries can sustainably create jobs and guarantee reasonable returns on their investments. We also appeal to federal and state governments to urgently review the curriculum of our various educational institutions, taking into consideration the current and future economic and social needs of the country and trends in the global marketplace, and with strong emphasis on entrepreneurial and technical education. It is also our considered view that both the federal and state governments should finally resolve the Niger Delta problem through the faithful implementation of the report of the Ledum Mitee Technical Committee on Niger Delta. This is very crucial since much of the resources that would be used for the diversification of the economy in today’s Nigeria will come from the Niger Delta region. In addition, the gas that will power the Independent Power Plants (IPPS) will also come from the region.
How can the government, employers and workers work in harmony to cushion the effect of austerity measures?
In our analysis of the ongoing macro and micro economic situation of Nigeria, there is need for every Nigerian worker to be worried as the nation has lost more than 40 per cent of its revenue from oil since the last six months as a result of the accelerated decline in the global prices of oil from over U$120/barrel in December 2013 to about U$30/barrel in December 2015. Our concern is that the implications for our fiscal space and monetary health are dire when we realise that oil receipts account for nearly 80 per cent of our national revenue and over 90 per cent of our nation’s foreign exchange receipts. And when the Federal Government called for austerity measure to cushion the economy from the effects of the falling prices, it became obvious that the tightening of expenditure meant that the quantum of funds available for the running of the economy has drastically reduced.
And as I speak, we are already beginning to see its impact on the present backlog in the payment of workers’ salaries across the nation with some states owing their workers up to five months in arrears while the Federal Government has been unable to pay December salary. And this is very unusual. The non-payment of workers’ salaries as a result of the current austerity challenges, expectedly, is because of the penchant of governments at all levels to hold the lives of workers in contempt and total disdain, believing that their lives could be suspended or held in abeyance for them to continue enjoying the unbridled looting of our collective patrimony.
Our concern is for peaceful industrial harmony to prevail. We expect the government to follow the rule of the game by not delaying the payment of workers’ salary because if decisive steps are not taken, government and employers at all levels are expectedly going to threaten the operational environment of workers, exacerbating the already oppressive work environment and conditions of employment under severe pressures across both public and private sectors of the economy this year.
What is your take on the recent report on the on-going discussion between Nigeria Atomic Energy Commission and Russia’s Rosatom Corporation to build nuclear plants in Nigeria?
Without mincing words, I am of the view that concerted effort as well as political will are required to adequately address the problem of ‘power poverty’ in the country. But we need to think outside the box of building nuclear plants in the country because of the attendant consequences. Nuclear power plants are some of the most sophisticated and complex energy systems ever designed and no matter how well it is designed and engineered, it cannot be deemed failure-proof.
It is evidently clear that we do not have the required capacity to manage disaster that may emanate from nuclear accident. This is because, Japan, even with the high level capability in terms of human and economic power, found it extremely difficult to manage the nuclear accident, which rocked the country in 2011 and led to the death of thousands of people. I am of the view that building of nuclear plants in Nigeria for now will no doubt subject the citizens to unavoidable risk.We cannot turn skewed-eye to the global concerns that a combination of human and mechanical errors at a nuclear facility could result in significant harm to people and the environment. It is obvious that operating nuclear reactors contain large amount of radioactive fission projects, which if dispersed can pose direct radiative hazard, contaminate soil and vegetation and be ingested by humans and animals.Human exposure at high enough levels can cause both short term illness and longer-term deaths by cancer and other diseases.
The issue of unresolved problem of radioactive nuclear waste remains a big issue. This is because nuclear power plants typically have high capital costs compared with other power plants. I am of the view that instead of subjecting the nation to these hazards, alternative power stations should, for now, be built rather than nuclear plants.
But, there is argument that workers form part of the nucleus of sustainable development. How do you see this?
Yes. Economically, attempts to implement sustainable economic development at national, state or enterprise level by government will, and must involve labour. As representatives of workers, trade unions, for instance, are vital actors in facilitating the achievement of sustainable development in view of their experience in addressing industrial change. The achievement of sustainable development can only be achievable when the government allows the freedom of association and the effective recognition of the right to collective bargaining; freedom from discrimination in employment and occupation; freedom from forced labour, and freedom from child labour, which are the four International Labour Organisation (ILO)’s global fundamental principles and rights at work, and which are cardinal to national rebirth that ought to enable working women and men in Nigeria to freely claim their fair share of the wealth they produce. We are of the view that when these rights are promoted and respected by the incoming government, workers in the country will be motivated and motivation will lead to higher productivity and higher productivity will lead to more profit and economic revival. Arising from these, more jobs will be created as industries will seek to expand.
Do these your demands apply to other nations of the world?
Yes. The prosperity and economic revival of many nations have, to a great extent, depended on the productive capacity and unifying strength of the workers. To ensure the prosperity of their nations, workers have in the past contributed positively in various ways. To ensure democratic consolidation and economic revival for the benefit of all Nigerians, all tripartite constituents and other key stakeholders must engage in social dialogue with a view to evolving policies and strategies that would lead to national rebirth. Such dialogues must be based on trust, respect for others’ views and commitment to the resolutions of such dialogues.
What advice do you have for the government on the current challenges confronting the Nigerian economic development?
Our advice on the challenge of national development is for the government to manage the economy in such a way as to promote job-led growth, rather than the present situation of jobless growth. Our concern is that unemployment continues to be the number one problem in the nation. This is largely due to the fact that the growth is concentrated in the crude petroleum sector, which continues to be an enclave. There is the urgent need for government to decentraliise the economy for genuine development to take place. I strongly believe that in order to promote development and growth, there is need for government to go into partnerships with the private sector on selective basis until such a time that the domestic private sector becomes fully developed.