Wage Cut, Layoff Imminent with Rising Lockdown

• Mele Kyari: Oil companies’ operations will not be disrupted

Obinna Chima

The growing number of COVID-19 cases, which is forcing many public and private organisations to scale down their operations, as part of measures to contain the spread, is expected to impact negatively on the profitability of organisations, analysts have said.

The situation may also lead to wage cuts as well as layoffs by organisations battling to balance the books and make returns to shareholders.

However, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, has said oil and gas companies’ operations in the country would not be disrupted despite the pandemic.

Commercial banks have also adopted various safety measures in line with their business continuity plans, due to the impact of the deadly virus.

As part of the preventive procedure to curb the spread of the virus as well as protect their employees and other critical stakeholders, many private and public organisations have instructed their staff to stay away from their official premises and some now work from their respective homes. Only those on essential services are allowed within the premises.

Speaking with THISDAY yesterday on the impact of the increasing lockdown of businesses, the Managing Director, Cowry Assets Management Limited, Mr. Johnson Chukwu, projected an increase in unemployment level.
According to him, the United States estimated that the impact of the virus, which has disrupted the global supply chain, could lead to an unemployment level of about 30 per cent in the US.

“For Nigeria, we already have a very high level of unemployment, which the last figure released about two years ago put at about 23 per cent.
“What we are seeing now is that a lot of companies are already asking their staff to work from their homes. So, if we get to a point where there is a lockdown, the micro-businesses would automatically lose their jobs,” he explained.

This, Chukwu, attributed to the fact that operators of micro-businesses get their income on a daily basis.
“The micro-businesses would be severely affected because they don’t have the reserve or the balance sheet size to continue to pay salaries.

“Then, for the medium scale businesses and the conglomerates, their capacity to sustain wage bills would depend on how long the crisis would last. We know the hotel industry has shut down, the night clubs, event centres, restaurants, even Eko Hotels.

“The international airlines have shut down and even the local flights, the frequency rates have reduced. So, we expect to see some layoffs or some limitations on staff salaries and wages. We can’t avoid job losses as it stands today,” Chukwu added.

Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, also said the development would lead to job losses and cut in wages if the impact of the pandemic drags on.

“If you are not working, where am I going to pay your salary from when I am not selling anything? If the hotels have closed, the airlines have closed, where will the revenue come from?

“Also, the exchange rate has gone down. So, basically we are facing a massive contraction in economic activities and we should expect that this may lead to some form of unemployment.
“But, it is a global problem, and not specific to Nigeria,” he said.

No Disruption in Oil and Gas Operations, Says Mele Kyari

Also speaking exclusively to Arise TV, the broadcast wing of THISDAY Newspapers, Mele Kyari said he was aware that the International Oil Companies (IOCs) operating in Nigeria had given work-at-home orders to their non-essential staff from yesterday.

He, however, added that this would not in any way affect oil production in the country.
He said: “Field and terminal operations will be sustained and no immediate impact is anticipated.”

Also clarifying Kyari’s statement, the Group General Manager of the National Petroleum Investment and Management Services (NAPIMS), Mr. Bala Wunti, said most of the IOCs would trigger the process of allowing non-essential staff to work from home yesterday and another from today.

He, however, declined to disclose the names of the affected oil companies.
He explained that the measure being taken by the IOCs was in line with the business continuity plan that the NNPC has with oil and gas operators in the country.

He said the business continuity plan was meant to anticipate any eventuality and was premised on 3PRs – Preparation, Prevention, Protection, and Recovery.

Wunti added that the plan would ensure that all critical oil and gas operations were sustained and were done in line with the Health, Safety, and Environmental (HSE) policies applicable to the oil industry.
He stated that with the measures put in place, oil and gas operations would not be disrupted.

Banks Adopt Safety Measures

Besides the oil industry, the banking sector has adopted safety measures to protect their staff and customers.
For instance, First Bank said it had implemented all best practice international protocols, including the recommended health and safety measures by the World Health Organisation (WHO) and the Nigeria Centre for Disease Control (NCDC) for keeping the banking hall safe for staff and customers.

“To gain access to any of our business premises, all staff and visitors undergo temperature screening and are required to either use the hand sanitisers we provide or wash their hands with water and soap for 20 seconds.
“From Monday, March 23, we will be asking non-essential visitors to our offices to contact us through other digital and online means like telephone, online meetings, teleconferencing, and others,” it stated.

It also urged customers to conduct more transactions through its various electronic channels.

Access Bank Plc, which said an individual, who visited one of its branches last Monday had since tested positive to the virus, announced the temporary closure of its Ligali Ayorinde branch in Lagos State.

“The health of all our stakeholders remain paramount at Access Bank Plc, as we are adopting all necessary measures to ensure safety at this time,” it added.

Wema Bank also stated that it now ensures that everyone visiting any of its branches undergoes a temperature test, makes use of hand sanitisers and maintains social distance.

It advised its customers to refrain from visiting any of its branches during this period and make use of its digital banking platform, ALAT.

“With ALAT, they can pay bills, buy airtime and data to make calls and stay online. They can also pay for their Cable TV subscription to stay informed during this period,” the bank added, saying it has increased awareness on the virus across its social media channels.

On its part, the Ecobank Group advised its customers to utilise more of its digital self-service solutions.
According to the bank, “Customers can bank from anywhere by utilising digital solutions to easily access their bank accounts, make payments, transfer funds, process salaries, and carry out other ancillary banking transactions from the comfort of their homes and offices without visiting branches.”

The bank stated that measures had been put in place at its branches to help curtail the spread. These it listed to include provision of temperature checks at all entry points to screen employees, customers and visitors; installation of hand sanitisers; equipping customer-facing staff with emergency response plan; encouraging social distancing, especially from anyone who is coughing or sneezing, among others.