There is palpable fear in the financial services sector, especially the banking industry, over possible job losses. This may be because of the serious liquidity problems facing the banks, following the implementation of Federal Government’s Treasury Single Account (TSA) policy, TOBA AGBOOLA reports.
For workers in the financial services sector, especially banks, these are challenging times. With the implementation of Federal Government’s Treasury Single Account (TSA) policy that mandates all Ministries Departments and Agencies (MDAs) to remit revenue into a single account, many bank workers have become restless.
For them, the fear of job losses, following serious depletion of liquidity in the banks as a result of the policy, is the beginning of wisdom. There is widespread apprehension that the policy could lead to rationalisation of workers.
Such apprehension may have been fuelled by the rush by MDAs, in an attempt to beat the September 15 deadline set by Secretary to the Federal Government, to pull out N1.2trillion, about $60billion from commercial banks to the Central Bank of Nigeria (CBN). Also, no fewer than 20,000 accounts were said to have been closed.
The effect of such huge remittance, it was learnt, was that commercial banks’ balances with the CBN usually earmarked for foreign exchange or bond purchases plunged from N73billion to N4.86billion. Already, banks are facing liquidity squeeze as the inter-bank, few weeks back, halted trading for three consecutive days due to sharp liquidity decline in the system. This was attributed to the implementation of TSA policy.
Expectedly, the liquidity decline has triggered fear within labour circles, with bank workers jittery over possible rationalisation.
Factional President, Nigeria Labour Congress (NLC), Comrade Joe Ajaero, says any policy that could lead to job loss does not only negate the quest for economic recovery, but also hinders national development. “Without employment, any policy geared towards empowering the majority and lifting them out of poverty, unfortunately, becomes a mirage,” he said.
According to Ajaero, anti-corruption, employment creation and eradication of poverty are part of the cardinal programmes of this administration, which it has re-emphasised since assumption of office.
While noting that these have been the expectations of many Nigerians, he said anything short of this would automatically force the organised labour to raise eyebrows.
President, Association of Banks, Insurance and Financial Institutions (ASSBIFI), Comrade Sunday Salako, is no less worried.
He said retrenching workers would worsen the country’s economy and bring untold hardships on the people, especially those employed in the banking sector. He advised banks not to be in a hurry to axe jobs because government can reverse the policy if it becomes harmful to the economy.
“Employers should not be in a hurry to cut jobs just because of a single policy. Before the policy, banks were making money and declaring fabulous balance sheets. The government can look at the policy and reverse it if they believe it can harm the economy,” he said. He however, said the huge sum of N1.2trillion moved out of the commercial banks to the CBN because of the TSA could affect the economy.
According to Salako, anything affects the liquidity of banks will also affect their ability to lend to operators in the economy. He said the only agent that could kick-start the economy and make it robust is the banking sector and that if such money was taken from them and given to the CBN to keep, it was capable of hurting the banks.
Salako however, said ASSBIFI is yet to advise government on the TSA because the union believes that the goal of the policy was to fight corruption and rebuild the economy. He said: “We want to be fair to the government, maybe in the process of finding a way to tackle corruption, TSA is the measure recommended to them. But with the policy and seeing the reactions of Nigerians, they can look at these reactions and try to harmonise the best way to move the country forward if the policy is not yielding the desired result.”
Similarly, the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE) urged the Federal Ministry of Finance to workout modalities on the implementation of the TSA that would not lead to job losses in the financial sector.
The group, while speaking to reporters in Lagos, described the policy as a threat to the existence of banks due to the poor saving culture of Nigerians, low income level and high inflation rate which make total disposable income of the average worker worthless.
NUBIFIE advised the Federal Government to think of better ways of creating jobs rather than creating a policy that will lead to job losses.
Its National President, Comrade Danjuma Musa, said his group will resist any attempt to axe jobs due to the implementation of the policy, adding that as laudable as the objectives of TSA may sound, the blanket directive to warehouse all funds in CBN will have far reaching implication on the economy.
According to Musa, the policy will surely slow down business transactions because most businesses in the country depend on loans to finance their projects. The pronouncement, he said, sent shock waves to the financial services industry due to the weak economy and the low capacity of banks.
“As a union, we sympathise with the banking community due to the effect of the Federal Government’s decision in its daily operations. We recall that during the consolidation and merger policy implementation, the effect of that policy was that it wiped out many banks from existence and brought about serious job losses,” Musa recalled, insisting that members of the group will not condone job loss this time.
An economic analyst, Funso Adeyemi, said although the policy was good, as it would curb corruption in the system, it will also worsen the existing high unemployment rate in the country. He said already over 4, 000 workers had been laid off in public and private sectors in the last few weeks.
According to the Managing Director, First Rit Nigeria Limited, Mr. Eric Umezurike, the purpose of allowing MDAs to operate separate accounts with commercial banks in the past and remit revenue generated after meeting their recurrent expenditures was to encourage workers of such agencies to amass wealth at the expense of their compatriots. He stated that it is reasonable that government has realised its mistake through the exemption of some agencies.
The government recently exempted 12 agencies including the Nigeria National Petroleum Corporation (NNPC) from abiding by the policy.
In spite of this, Umezurike said the entire policy was a decision taken without thinking of the mechanics of how its implementation will work.
He expressed worries that bank workers handling public accounts may be retrenched, as there will be no need to retain them in service.
Bank workers speak
Some workers who pleaded to remain anonymous, said the directive raised fears of possible retrenchment in the sector. They noted that contrary to Federal Government’s promise of creating over three million jobs yearly, the new policy will invariably lead to job losses in the financial sector and the federal agencies.
It is feared that agencies whose workers may be affected by the policy include the CBN, Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC) and the Nigerian Ports Authority (NPA).
Others are the Federal Airport Authority of Nigeria (FAAN), Nigeria Shippers Council (NSC), NNPC, Federal Inland Revenue Service (FIRS), and Department of Petroleum Resources (DPR), among others.
According to Mr Justus Oke, a worker with one of the old generation banks in Lagos, bank liquidity has continued to drop as many banks are moving money to the CBN in compliance with the government’s directive, even as banks continue to provide funding for advance payment for foreign exchange purchases.
A public affairs analyst, Mr. Victor Ohai however, said the policy will strengthen banks to source for funds rather than relying on deposits from government agencies; banks will be forced to adopt strategies of generating revenue by granting financial support to small scale industries, which are the engines of any economy.
Banks must support the agric sector by granting loans to farmers at low interest rates so as to enhance the development of the agric sector and by extension, achieve self-sufficiency in food production. By next year, there will be a paradigm shift away from the past when banks relied on public sector funding.
He further said the banking sector will focus on retail banking, which requires mass employment and not retrenchment of workers.
Another analyst, Mr. Odili Ewepa, also said TSA will block leakages and enhance monitoring of revenue accruing to the CBN. He called for electronic-collection whereby all payments into the treasury account is reflected simultaneously in the budget office and offices of other relevant government agencies.
Ewepa further stated that TSA will ensure that nobody utilises public fund without appropriation as it is the practice in other parts of the world. He dismissed insinuations that the policy will lead to retrenchment of workers in banks as baseless, noting that it will make banks come out of their comfort zone.
According to him, the era when a worker would be appointed assistant general manager because he or she was able to attract a ministry to deposit funds in the bank is now over. Ewepa said with the present situation, banks will concentrate on developing small scale enterprises as practised in other parts of the world such as China and Indonesia.
President Muhammadu Buhari, on assumption of office, ordered that all revenues be paid into the TSA as a way to stem corruption and aid transparency. According to him, the scheme would automate revenue collection of all MDAs directly into the Consolidated Revenue Fund account of the CBN.
The TSA was aimed at promoting transparency and facilitating compliance with Sections 80 and 162 of the 1999 Constitution.
Independent Revenue e-Collection Scheme is implemented under TSA initiative, which requires that government revenue collection is put into a single account for proper cash management.
Experts say the implementation of TSA would help curb corruption in the system, urging workers to embrace the new policy. But as it turned out, the closure of MDAs’ accounts domiciled in commercial banks and transferred to the Federation Account has caused huge revenue loss by banks. The fear now is that this would in turn, affect workers in form of right-sizing.
However, the Federal Government has said that it would relax its rule on the TSA implementation to give special attention to security agencies.
Speaking in Abuja when he received the Inspector-General of Police (IGP), Solomon Arase, in his office, last week, the Accountant- General of the Federation (AGF), Ahmed Idris, said special attention would be given to security agencies in the implementation of the policy in view of the recognition of security of lives and property as one of the cardinal agenda of President Buhari’s administration.
During the commencement of implementation of the policy, the AGF had insisted that there was no exemption for MDAs.
The AGF did not give details of what the special attention would entail, he identified the security institutions that would benefit from the concession.
They include the Police and the Armed Forces to enable them continue to successfully deliver on their respective mandates of securing the country.
The AGF said his office was aware of the enormous responsibility the security agencies were facing in the fight to contend with armed robbery, insurgency, kidnapping and other societal vices.
Idris said: “The government will ensure that the release of money required for the execution of all special operations aimed at overcoming these evils were not in any way affected by the implementation of the TSA.”
He reassured the MDAs that the policy on the TSA was not meant to hamper their activities, but to entrench a more transparent, efficient and robust management of public funds towards the speedy realisation of government plans and programmes.’’
He explained that the days of carrying money in sacks to payment points were gone, adding that the TSA would complement the existing electronic payment platforms.
Some revenue generating agencies have made cases for the policy to be relaxed to accommodate their peculiar needs towards discharging their responsibilities.