AFBTE attributes job losses to economic recession
• 3.7 million Nigerians disengaged in 2016, says NBS
The Association of Food, Beverages and Tobacco Employers (AFBTE) has attributed the high rate in job losses in the country to economic recession. “We recorded a significant drop in turnover, profit margins and capacity utilisation, which has resulted to massive loss of jobs, while the companies that didn’t reduce their work force reviewed their staff salaries and allowances downward.
Meanwhile, the National Bureau of Statistics (NBS), in its unemployment report for the fourth quarter (Q4) of 2016 has said 3.67 million Nigerians became jobless in one year.
The NBS noted that the number of unemployed Nigerians rose from 7.51 million at the beginning of October 2015 to 11.19 million at the end of September 2016.
The organized labour however, lamented that the economy was not friendly to manufacturers.
Speaking in Lagos at the 38th annual general meeting of AFBTE, its president, Paul Gbededo said the sector was badly hit by the economic recession in the country.
“Trouble started for the manufacturers when the Central Bank of Nigeria (CBN) removed 41 items from the list of those to access foreign exchange,” he said.
He added the continued drop in the Naira to Dollar exchange rate and the high cost of sourcing forex made it difficult for the firms to bring in raw materials and those that were able to pay didn’t even get the dollar supplied to them until after three or four months.
Gbededo therefore, urged government to reduce company income tax (CIT) for manufacturers as a way of attracting investments aimed at pulling the economy out of recession as it has been done in other countries.
“Government should also adjust Value Added Tax (VAT) and Personal Income Tax (PIT) downward as the country is in recession with growth of the productive sector being significantly negative and consumption has whittled down as a result of inflation,” he added.
The NBS pointed out that the high unemployment indicates less productivity and less contribution to the economy as people without jobs were spending less. Consequently, the government ends up borrowing money because of low revenues and high spending. Rise in employment rate also affects other areas, such as quality of health services and living standards.
Professor Olawale Ajai of the Lagos Business School (LBS) said for manufactures to survive in the economic downturn, there was need for business owners to concentrate more in competing and provide superior service.