Nigeria Labour Congress

Labour House

Abuja, Nigeria

 

 

An Address read by the President Nigeria Labour Congress,  Comrade Abdulwaheed Omar, at the occasion of a visit to His Excellency, The President of the Federal Republic of Nigeria Alhaji Umaru Musa Yar'Adua, at the Presidential Villa Abuja,  24th February 2009

 

Protocol

On behalf of the working people of Nigeria, I wish to welcome Mr. President back from your annual vacation which you chose to spend at home. We received the news of your decision to spend your vacation at home with considerable relief as it is a welcome departure from the craze by our leaders at all levels, who jump onto every available flight to other countries, often on flimsy trips at huge costs to the nation. We hope this example will be emulated by other government functionaries in order to save the nation from incessant resource hemorrhage.

 

We are delighted that Mr. President has found time out of your crowded schedule to receive us personally in order to avail us of this opportunity to share views and ideas on important national issues and others that are currently agitating the minds of our members across the country.

 

Global Economic Meltdown

The first of these issues is the global economic meltdown and the response of government to it. We are aware that government is concerned about the crisis and has already taken some measures to address it. For example, we are aware through media reports that government is now involved in a belt-tightening programme that envisages cuts in the perquisites of political office holders. While we salute the initiative of government in this regard, we believe that this initiative will be more effective to the extent that it is based upon and derives from a correct understanding of the causes of the meltdown and its particular impact on Nigeria.

 

Although many causes are implicated, one generally accepted fact is that the global crisis has arisen as a result of the collapse of the economic ideology of free market forces. The economic meltdown has now shown conclusively that the economy and its regulation cannot be left to the whims and caprices of free market forces and that government does have a strong and leading role to play not only in the regulation of business and the economy but that it must also be a key player in the ownership and management of business and non-business institutions for the regulatory role to make the desired impact.

 

It is for this reason that in the so called liberal economies, notably the USA, government has now moved to outrightly nationalize or acquire part ownership of several major banks and businesses. Very interestingly too, we find that Western governments are now rejecting the prescriptions that the IMF and World Bank have always pushed Third World countries in general and Nigeria in particular to adopt in similar circumstances. It is also clear now that the privatization of state owned enterprises in the name of free market forces does not and cannot guarantee the public good. We therefore call on Mr. President to, as a matter of urgency, constitute a National Economic Crisis Management Team to be more inclusive in order to help Nigeria understand the full causes and implications of the crisis and help prepare a National Response Plan to the crisis.

 

Economic Bailout Plans

In saying this, we want to indicate that labour would be opposed to the kind of bailout plans that seek to socialize the losses of big business while privatizing their profits. Over the last years for example, Nigerian banks have largely fallen over themselves in the relay to declare huge profits and dividends. However, we would also like to urge Mr. President to conduct a thorough investigation into the management and health of the banks and stock exchange markets as in spite of the huge profits being declared, the value of the shares of the banks have shrunk to a fraction of what they were worth only some months ago. We believe that something must be terribly wrong in a situation where banks are declaring huge profits and yet, the value of their shares continues to tumble. Unless what is wrong is found quickly and addressed, the impact of the global failure of free market forces on Nigeria may prove to be much worse than what we are currently witnessing in the developed countries.     

 

We are worried by the continued closure of industries in the country as this has continued to harm employment generation as well as generate lower economic growth. Recent reports show that one of the credible ways of development as a nation is through manufacturing and not the sales raw materials in the international market.

Injection of State Funds into Public Works

Mr. President, one measure which has been adopted to deal with the crisis in the developed countries is the massive injection of state funds into public works that are designed to generate employment for millions of people. While the catastrophic unemployment figures in these countries are of recent origin and traceable partly to the collapse of market forces, Nigeria has had a situation over the years where the unemployment rate has been catastrophic. In essence, what these economies are dealing with is what has been in Nigeria for several years. In the case of Nigeria, a more dangerous aspect of the problem is that it affects largely the youths the potentially most productive segment of the population. However, each Nigerian government failed to address the problem because of the wisdom received from the IMF and World Bank that it was not the business of government to be directly involved in the creation of jobs. Now that this wisdom has proved to be false and the apostles of free market forces are injecting billions of dollars into the public creation of jobs, the Nigerian government needs to do the right thing by investing directly in job creation through, among other things, the massive funding of public works programmes and the establishment of cottage industries.

 

Nationalization of Failed Private Enterprises

Another measure is the continued privatization of the State-owned enterprises in the country. We maintain our long held position that (a) privatization has adverse effects for employment, prices and public welfare (b) there should be no privatization of the strategic economic, social sector and of public monuments (c) and that where privatization is inevitable, the process must be transparent, participatory and accountable with emphasis on the need to protect jobs and benefit of Nigerian workers in the effected enterprises.

 

What has become worrisome is the continued sales of every category of public enterprise in manners that violate the basic tenets of transparency and openness. It is in this light that we kindly request Mr. President to revisit the entire privatization programme with a view to instilling sanity and transparency in the process.

 

Regulating the Activities of the Market

A third measure is the need to regulate the activities of the market. In this regard, we find it strange that while governments across the world are now moving in the direction of more government regulation and protection of local industries, there is still quite some talk about deregulation of the market in Nigeria. To be specific, we cannot understand the logic of those who are calling for the deregulation of petroleum prices. As Mr. President would have noted, the Nigerian people have made a huge sacrifice by not insisting that petrol prices be reduced as a consequence of the collapse of international crude prices. Thus while every body knows that crude prices have collapsed to about 20 25% of their prices some nine months ago, Nigerians have continued to pay the price that obtained when crude oil prices were at their peak. We thus see the tokenistic reduction in the pump price of fuel from N70 to N65 as an attempt to bolster the deregulation argument. Deregulation cannot work in a situation like Nigeria when trade in various commodities, especially petroleum products, has been captured by a cartel. In fact, the astronomical prices of diesel, the price of which has been purportedly deregulated demonstrate this dilemma.  In any case, Labour has always opposed the deregulation of petroleum prices because of its harsh impact on the poor in the country. Today, the estimate of the poor in Nigeria is 70% or about 98 million of the 140 million estimated population of the country. While deregulation fuels the profits of importers and marketers, the large majority of Nigerians who are poor suffer untold hardship. Researchers have warned, for example, that the high rate of deforestation in all parts of the country, especially the Northern part is being driven by the high price of kerosene. Labour totally rejects calls or plans for the deregulation of petroleum prices as this will not be in the interests of the vast majority of the people in the country.   

 

Labour also urge you to rapidly fix the refineries to boast the available quantum of products in the country and to save the resources used on importation.

 

Confronting Corruption

Mr. President, we believe that you will be the first to acknowledge that the issue of corruption lies, in part, at the heart of the failure of development efforts in Nigeria. While we are aware of the commitment of Mr. President to fight corruption, we would also like to observe with great concern that it would appear that the original spirit of the fight against corruption is now all but dead. As the various probes by the National Assembly have shown, public officers in the last regime stole the country blind in every area of national life and aspiration. The revelations in the cases of the power sector, the maritime sector and others are so mind boggling that the expectation has been that many of the perpetrators would by now be in jail. However, what we see is a situation where those found guilty of corruption are in fact leading delegations to and being warmly received by Mr. President. These sorts of actions tend to portray the current administration as rolling back the fight against corruption or, at worst, of encouraging it.

Mr. President, we are aware that United States courts have recently convicted some companies for corruption which involved bribing Nigerian government officials.  It is sad that till today, our government has not requested for the names of these officials even though the U. S. government publicly indicated that it was willing to release the names to government if the request was made.   We urge stricter and more vigorous prosecution of those accused of corruption by the EFCC and other anti-corruption agencies in Nigeria. Finally we would want to urge Mr. President to place a great distance between his administration and those accused of and publicly perceived to be horrendously corrupt. On our part, we shall be prepared to support the efforts of Mr. President in this direction.        

 

Release of Electoral Reforms Committee Report and Good Governance

We would also want to observe that corruption applies not only to the theft of public funds but also to the theft of the people's vote. Indeed, political corruption has been the second half of the bane of economic, political and social development in Nigeria. The massive and criminal rigging of elections, the conduct of politics as warfare and the idea that political godfathers rather than the electorate are the sources of legitimacy for political office holders have seriously undermined the trust of the people in government. We want to salute the courage of Mr. President not only for being the first in the history of the country to recognise the grave danger that the situation poses for the corporate existence of Nigeria as a nation state but for setting up an Electoral Reform Committee to address the problem. This courage is further demonstrated in the robust terms of reference given to the committee and the inclusion of Labour as a member of the committee.

 

In line with our contributions and submissions to the Committee, we want to urge Mr. President not to relent in his determination to bequeath to the country a new order of politics that is characterized by integrity, fair play, sportsmanship and where the people genuinely feel that their votes count. The example of Ghana and the United States show what can happen when principled politics takes the centre stage of national development aspirations. We believe that this can be the most enduring legacy that Mr. President may yet bequeath to our country. Indeed, one clear signal that Mr. President can give that a new era of politics is in the offing would be the immediate removal of the current chairman of INEC. In addition, we believe that there is need to set up a Political Crimes Commission equivalent to the EFCC. We believe that it is in the provision of sufficient deterrents that brazen political crimes such as those committed by members of the political class in Nigeria can be discouraged. Finally, and because of their obvious linkage, we believe that there is need to connect actions on economic corruption with actions on political corruption. In this regard, individuals found guilty of economic crimes must be sanctioned in such a way that they do not profit from their crimes in the political sphere; the reverse should also hold.          

Confront Problems in the Education Sector

Mr. President, one other concern we have is the crisis in the education sector. As various studies and reports have shown, the quality and quantity of education in Nigeria are among the lowest in the world. Today, only a small fraction of those seeking entry to higher education can gain admission. The admission rate in the case of the universities is less than 15% of those who qualify. The situation is not much better in the other sectors of higher education. The conditions at the primary and secondary school levels which are the responsibilities of the other tiers of government are to put it mildly, horrendous. It is therefore important to raise the level of funding for education so that educational infrastructures can be improved, the quality of instruction improved and more students admitted.

 

In the area of the universities, a lingering problem has remained the situation in the University of Ilorin where as several panels, including those set up by this government, have established that 49 academic staff were unilaterally and unjustly sacked by the Vice-Chancellor. The situation has generated several crises in the university system and we are aware that it has even been brought to the attention of Mr. President. We urge Mr. President to intervene in the matter by ensuring that justice is done quickly. We believe that any issue, no matter how already advanced within the court system can still be settled out of court. This indeed, is the position of the Supreme Court of Nigeria. The argument that the courts should be allowed to conclude on the matter only helps those who have been and are still working tirelessly to ensure that justice is delayed. We therefore want to urge Mr. President to resolve the matter administratively and decisively.     

 

Confronting the Problems of the Power Sector

Power is equally a crucial driver of national development. For this reason, it is a true calamity that in spite of the huge national resources that have been ploughed into the energy sector, most of the country is still run on generators. This fact is confirmed by the inclusion of some N2.8 billion in the 2009 Budget for the purchase of diesel oil and maintenance of generators for official government business. As a result of the power sector crisis, most of our jobs are now being shipped to neighbouring African countries, notably Ghana, as companies relocate to avoid the huge costs associated with running their businesses on generators and poor power supply from the national grid. We are aware that the Federal government is currently partnering with state governments to raise some N700 billion to deal with some aspects of the problem. However, as the probe of the power sector projects under the last regime has shown, it is now clear that the availability of funds is not enough; how these funds are used appears to be more crucial. Therefore, we want to urge Mr. President to put in place a mechanism for ensuring the strict application of transparency and accountability norms in all ongoing and future power projects. We also want to urge a sense of urgency in the execution of all projects in the sector.

 

A Return to National Planning

Mr. President, we are aware that some of the issues we have raised are in the 7-point Agenda of your government. However, while there may be much talk about this agenda even by highly placed officials of government, very few Nigerians including those making reference to it in their speeches understand what the agenda means. What is needed is a holistic planning framework within which such an agenda may be located. In essence, we believe and are calling for a return to the framework of national development planning that characterized not only our early history of nation building but that produced the steel plants, fertilizer plants, refineries, housing estates and other state assets that the last regime regretably dashed away to its friends. The only difference would be that under your leadership, we would now be applying the framework in erecting the foundation for a new national beginning that hopefully, future generations of Nigerian rulers will want to commit to and build on. 

 

Demand for Minimum Wage

Mr. President will recall that long before your recent leave, the NLC had submitted its request for a negotiation of a new national minimum wage. The demand for a new minimum wage has become necessary given the current cost of living. Our arguments for the new minimum wage have always been unassailable. The Nigerian worker, particularly in the public sector, is one of the least paid in the world. This is true when taken against the absolute national currency, as well as wages and salaries based on Purchasing Power Parity (PPP), which adjusts the national currency for the differential cost of living of the relevant nations.

 

It was in recognition of how bad the situation was, indeed the crisis-nature of the situation that led the NLC to demand for wage increase during the President Olusegun Obasanjo regime which culminated in the signing of an agreement aimed at providing a living wage within three years.

 

The consequence of the abdication of the agreed approach to the implementation of the phased-wage increases has been that wages and salaries have been sharply depressed.

 

To compound matters, since the 15 percent increase within the framework of wages and salary consolidation, a number of developments have further depressed the actual take-home pay of workers. Inflation has intensified in the last one year, with the cost of living index in the urban sector increasing by over 14 per cent. The disproportionate increase (20.9 percent) in the costs of food means that the erosion in the real wages and salaries of workers is alarmingly severe.

 

Worse still, the process of consolidation has resulted in a significantly higher income tax burden on workers. The process of monetizing and consolidating in-kind, benefits which were hitherto not taxed has resulted in an escalation of the tax paid by workers. This has further depressed the real take home pay of workers.

 

Apart from this erosion in the real take home pay, the relativities in the economy is quite skewed against the working class. For example, a comparison of workers' pay to that of political office holders within the same public sector does not suggest that there is a rationale or principle undergirding salary and wages in Nigeria. For example, while workers' salaries increased by 15 percent between 2006 and 2007, those of political office holders increased by over 800 percent.

 

Before your annual leave, there have been indications that negotiation on this was soon to commence. We were therefore surprised that during your leave, statements emanated from the Presidency that there would be no wage increase. This was followed up with a submission for the reduction of salaries and allowance of political officer holders. While this move to reduce the salaries and allowances of political office holders is commendable, a clear distinction between the condition of ordinary workers and political officer holders needs to be drawn. In particular, the demand for new national minimum wage is a humane call to consider that many workers in Nigeria are earning much less than can sustain them, thus making them perpetually live in debts and trapped in a situation of crushing poverty. We believe that Mr. President is aware of this distinction and will kindly direct the relevant government machinery to commence negotiation with labor on this important national issue.

 

Mr. President, we believe that you owe achievement of these goals as an obligation to yourself, ourselves and the entire country.

 

Once again, we are immensely grateful for this rare opportunity you have given to us to meet with you. We pray to Allah to give you the grace, wisdom, health and long life to serve the people of this great country so well that you will be remembered only for your legacies of good deeds by Nigerians and posterity.

 

Long Live the Nigeria Working people,

 

Long live the Federal Republic of Nigeria.


Abdulwahed Omar

President, NLC