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Thursday, 9 June 2016

FG struggles to settle $7bn letters of credit as foreign reserve falls to $27.3bn

More trying times await the country as its foreign reserve slowed to $27.3 billion with a deficit of $7billion outstanding letters of credit to settle, it was learnt yesterday.
A knowledgeable source on the nation’s economy said yesterday in Geneva, Switzerland, that the $27.3 billion could hardly fund three and a half months’ import, which could spell gloomier days for manufacturers.
The source said: “As at today, Nigeria has only $27.3billion in its foreign reserve and this cannot fund more than three and a half months’ imports. The fact that the foreign reserve is depleted is the reason government allowed the Central Bank of Nigeria (CBN) to adopt a flexible exchange rate.”
Besides, the threat issued by the Minister of Labour and Employment, Dr. Chris Ngige to withdraw the operating licences of bank and financial institutions that retrench workers have drawn the ire of the Nigeria Employers Consultative Association (NECA).
Responding to the threat yesterday at the ongoing 105th International Labour Conference (ILC) of the International Labour Organisation (ILO), the Director General of NECA, Olusegun Oshinowo, berated the minister for lacking basic principles of labour relations.
According to Oshinowo, the labour arena is guided by laws, regulations and practices as dictated by relevant laws as well as the guidelines of the ILO. He noted that the threat had left many of the sacked employees in a worse state as the minister had refused to devout his time to demanding exit strategies for the workers and had instead embarked on empty threats.
While admonishing the Federal Government to move swiftly and fix the economy, the NECA chief insisted that employers would embark on retrenchment whenever the occasion demands such an action.
His words: “The minister is getting very reckless with his disposition and comment on the issue of retrenchment. He is appropriating to himself the power which the state has not conferred on him. His comment on the withdrawal of licence at a global forum is a shame and embarrassment to Nigeria. It is a comment that is ‘unministerial’ and simply painted a very ugly picture of governance and government in Nigeria.
The minister has continued to miss the point . Our disposition is not ideological or sectional. We have challenged his action on the basis of rule of law, structure of engagement, dispute resolution procedure and objectivity. He also fails to realise that labour relation is not a pedestrian discipline.
It has its own body of knowledge, institutionalised practice and nuances. The minister’ s comments and actions have not demonstrated an iota of understanding of these basics. We once again reiterate that employers will retrench if it becomes necessary and compelling and would respect the law in doing that by discussing with the union, where one exists, including paying redundancy benefits to affected employees.”
Oshinowo posited that the job of the Ministry of Labour and Employment is to ensure that employers do the needful in line with the law by asking if they follow the rule of law in carrying out the retrenchment .
Oshinowo also berated Ngige over the need to engage in Collective Bargaining Agreement (CBA), asking what employers would do where there is no labour union that would negotiate on behalf of workers.
Meanwhile, the lingering foreign exchange crisis has been blamed for the worsening balance sheet records of the nation’s banking industry and the mass sacking of the sector’s workers.
Specifically, the development that has affected all the deposit-taking institutions in the country, has significantly declined the “fee income” and “non-interest/commission” lines of the majority, as failed forex transactions due to scarcity reduce their respective earnings’ capacity.

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