Economist hails CBN’s intervention over lay off in banking industry

An economist, Dr Boniface Chizea, on Monday commended the Central Bank of Nigeria (CBN) for the decision reached with the Bankers Committee that layoff of staff in the banking sector should not be done in view of COVID-19.

Chizea, the Managing Director of BIC Consultancy Services, gave the commendation in an interview with our reporter in Lagos.

The decision to put on hold layoff of bank staff came up after a special meeting of the Bankers’ Committee convened on May 2.

The meeting was to further review the implications of the COVID-19 pandemic on the Nigerian banking industry.

A statement by Mr Issac Okorafor, CBN Director, Corporate Communications, had said the committee deliberated on the issue of the operating costs of banks in view of the disruptions emanating from the global economic difficulties.

In order to help minimize and mitigate the negative impact of the COVID- 19 pandemic on families and livelihoods, it was decided that no bank in Nigeria shall retrench or lay-off any staff of any cadre (including full-time and part-time).

The committee also decided that, to give effect to the measure, the express approval of the CBN shall be required in the event that it becomes absolutely necessary to lay-off any such staff.

Chizea commended the CBN for its intervention and said there must be a deliberate change in mindset going forward by managements, whereby they will exhaust all available survival options before resorting to retrenchment.

“Strategies like pay cuts, attractive terminal benefits for those close to retirement to encourage them to exercise the option of voluntary early retirement or even reduced work hours, working from home which has gained considerable traction under this pandemic should first be explored before resort is had to retrenchment,” he said.

Chizea urged corporate bodies to arise to their responsibilities of giving practical vent to the often heard statement to the effect that, “Our Staff is our greatest Asset”.

According to him, this most valuable asset should never be the first to be shown the door in times of crisis.

“There should be some sacrifices made,” he said.

Chizea urged other sectors of the economy that might be thinking of laying off their staff not to be discussing stimulus on one hand and asking workers to go on the other hand.

He noted that the banking sector would suffer its own share of losses as non-performing loans would punch a big hole in their balance sheets.

The economist said this was still not enough to lay off their most valuable assets, thereby increasing unemployment rate in the country.

“The pandemic has unleashed unprecedented hardships on the population to the extent that the prospects staring us all on the face is that of grinding poverty across the globe,” Chizea said.

He thanked CBN for coming up with a window to cater for those who were affected.

According to him, the CBN had demonstrated good leadership as the first body out in front to put up an unprecedented ambitious stimulus package amounting to a whopping 3.5 trillion Naira.

The stimulus, he said, catered for all groups exposed to vulnerability due to COVID-19, noting that the apex bank, having done this, could not countenance lay off under its watch.

BIC Management Consultancy Company offers consultancy services to organisations, including CBN and Nigeria Deposit Insurance Company.