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COVID-19: CEOs in frantic drive to save businesses



Banks reap big from enhanced digital capacity


As the Coronavirus (Covid-19) pandemic continues to take its toll on both the global and Nigerian economies, there are strong indications that many Nigerians are going to be thrown back into the nation’s oversaturated labour market as the days go by.

This is because not a few chief executive officers in the banking, aviation, hospitality, manufacturing and other key sectors of the economy have now seemingly embraced the option of streamlining and restructuring their services as a way of remaining in business.

Even employees who will retain their jobs in most of the badly hit industries, Business Hallmark has learnt, will have to grapple with a pay cut. The idea, findings reveal, is for employers to reduce to the barest minimum, their operating costs to save their businesses from total collapse.

The first case of Covid-19 infection was reported in Wuhan, China in November 2019, and by December it had spread rapidly in the province. According to a tally from official sources compiled by AFP on Saturday, May 2, the pandemic has killed at least 241,682 people globally, with more than 3,398,390 cases registered in 195 countries and territories. Of these, at least 1,023,900 are now considered recovered.

According to data from the Nigeria Centre for Disease Control (NCDC), Nigeria, which recorded an index case through an Italian who came to resume work in Lagos on February 27, had 2388 confirmed cases, 85 deaths and 385 discharges as at May 2.

The pandemic has caused a severe global socioeconomic disruption, including one of the worst economic recessions in recent history. It has led to the postponement or outright cancellation of sporting, religious, political and cultural events and widespread supply shortages exacerbated by panic buying.

This subsequently led to a slowdown in global manufacturing and with it a crash in the global stock market as countries that depended on imports from Asia, Europe and China saw their real sector unable to engage in serious production.

From banking to aviation, manufacturing, telecommunications, oil & gas, shipping, entertainment and sport, fashion, no sector has been left without a fair share of the blow as it has been one postponement after another leading to the loss of billions of dollars in revenue. Even footballers in Europe have had to take pay cuts to help their clubs weather the storm with some non-playing staff being laid-off.

The global aviation industry’s umbrella body, the International Air Transport Association (IATA), has put losses globally at $314 billion in 2020 from an initial $113 billion resulting from passengers’ revenue slump. It added that it will be putting at risk 25 million jobs that are dependent on aviation globally.

IATA said, “African airlines had lost $4.4bn in revenue as of March 11, 2020. Ticket refunds have increased by 75 per cent in 2020 compared to the same period in 2019 (February 01 – March 11).” The association said further that South Africa would also lose six million passengers, $1.2bn in base revenues and risk over 102,000 jobs. Even as we write, the notable South African Airways may be on its way to liquidation as the shocks of COVID-19 have seemingly come to be a terminal resting point for the long-troubled state carrier.

The story is not any different even in the oil industry. “We’re looking at anywhere between five and seven years of job growth wiped out in a month,” Philip Jordan, VP at BW Research Partnership, a research consultancy, told Bloomberg. “What makes it sort of scary is this is just the beginning. April is not looking good for oil and gas,” he said further.

On Wednesday, Seplat Petroleum Development Company Plc released its financial statement for the first quarter (Q1) ended March 31, 2020, with gross profit dropping from $81.4 million in Q1 2019 to $33.1 million in Q1 2020. This marks a plunge of 59.3%. Meanwhile, profit before deferred tax/loss stood at $105.8 million during the period under review. This, some analysts aver, may only be the first day in a tale that seems to be inching towards what has come to be seen as the new normal in the global business arena: sack and a pay cut for ‘non-critical staff.’

Nigeria banking and other key sectors

On Friday, the biggest Nigerian consumer banking service provider, Access Bank Plc announced that a downward review of staff salaries and reduction of its workforce had become imperative given its hampered operations occasioned by the lockdown to contain the Coronavirus pandemic.

The chief executive officer of the bank, Herbert Wigwe, who gave the hint in a video that has gone viral, said he is willing to take a 40% pay cut as part of efforts to cut operating costs.


Wigwe, who empathized with staff while urging everybody to make “some adjustments of some sort,” said, “We probably don’t need as many security men as required, even to the fact that we are not going to have all our branches open between now and December.”

“We certainly don’t need all the security men. We don’t need all the tea girls. We don’t need all the cleaners. We don’t need all the tellers, et cetera, et cetera.

“So that number of staff which represent 75% of our staff strength, I think, is the one we need to speak with their employers to get them to rationalise to the level that we think will be necessary to sustain a mean but a customer service-oriented institution.”

Wigwe said discussions were already ongoing with recruiting agencies and contracting firms on how to cut back on the workforce. He, however, assured that the bank would revert to what is normal when things improve, pointing out that the adjustments are necessary to survive the difficult times.

There are speculations that more banks will either do the same or take even more drastic measures in the weeks ahead.

However, the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) is kicking against any plan by any commercial banks to sack their workers on account of the Covid-19 pandemic.

Speaking recently on the subject, its National President, Comrade Oyinkansola Olasanoye warned that any bank that sacks workers will “face the repercussion.”

She said critical sectors of the economy needed a viable and modern collective agreement, coupled with the government having a social insurance system in place for Nigerians, among other issues.

Olasanoye said: “I am not expecting any bank in Nigeria to lay-off staff. However, there will be effects on the profitability of the banks and there are going to be effected on people that took loans because they cannot go into production.

“Although the federal government has announced that there should be a reduction in an interest rate for people that have taken loans, now we are not talking about the interest rate but production to have the ability to pay back.”

Meanwhile, Business Hallmark is not aware that banks have secured the approval of the Central Bank of Nigeria to proceed with the planned mass sack, which implies that the apex bank may halt the exercise.

This is coming on the heels of the fact that the CBN had given a stern warning to all banks that they must seek its approval if they must sack more than five staff at a time. The warning was contained in the communiqué issued at the end of the Bankers Committee meeting in February.

The committee, in a circular signed by the director, Financial Markets Department, CBN, Angela Sere-Ejembi, emphasized that all banks should send a sample of contract letter issued to outsourced staff + SLA  with the company being used to run outsourced staff.

“Banks should note and be guided by the CBN circular in respect of laying off staff that is more than five. This requires apex bank’s notification and approval going forward,” the communiqué stated.

In the aviation sector, the Airline Operators of Nigeria (AON) has been lamenting the impact of the Covid-19 lockdown on the industry. According to AON, the lockdown has left the Nigeria aviation industry with an exposure of about 251,000 direct job losses including the various parastatals, ground handling and support service providers, as the failure of airlines will bring down the support structure as well.

AON further noted that the “disruption to air travel due to the continued spread of Coronavirus will cost Nigeria’s aviation industry over N160.58 billion (using Bureau de Change rate of N370 to $1) ($434 million) in revenue and 22, 200 jobs.”


This, according to the operators, is in addition to the loss of approximately 2.2 million passengers. Already employers in the industry have begun massive cut of salaries amid the grounding of over 76 domestic planes.

Last week, Arik Air slashed the April salaries of its workers by 80 per cent and sent over 90 per cent of its over 1,500 employees on compulsory leave until further notice without pay. Azman Air and Max Air had earlier sent over 1,000 workers on compulsory leave also without pay, citing the ravaging effect of the Covid-19 on business. It was learnt that Air Peace, Aero Contractors, Dana Air are yet to make a decision.

In a telephone interview with Business Hallmark, managing partner, Westview Travels and Tours Limited, Mrs Joy Alexander-Oziegbe, lamented that Covid-19 and the global lockdown have affected the travel industry which she said is the worst hit of all sectors.

“I believe among all the sectors, it (travels and tours) is the worst hit”, she said.

Mrs Alexander-Oziegbe revealed that she intends to focus on logistics (another aspect of her business) as a way to survive since there is no way to make money from travels and tours for now until normalcy returns. This, she said, has necessitated a pay cut as logistics is not as lucrative as travels.

She said, “But because that aspect (logistics) is not so busy because people are conscious of spending, I will have to slash salaries. We are focusing on logistics now as a means to survive. The travels segment was way more lucrative then.”

Reacting to the instability in the travels and tourism sub-sectors caused by the Covis-19 pandemic, the Institute for Tourism Professionals of Nigeria, ITPN urged the federal government to accord priority and prime attention to the sectors in all its economic stimulus, palliatives and interventions.

The national president, ITPN, Abiodun Odusanwo, said the sectors had suffered the hardest hit by the Covid-19 pandemic because of the nature and economic activities of the business that involved the movement of people and services. This, he said, was why operators in the sectors needed urgent intervention from the government to salvage the sectors from looming collapse.

Odusanwo said there was the need for immediate promotion of domestic tourism as an inward strategy to boost inbound tourism due to the dwindling fortunes of international travel bans and restrictions.

“Also needed is a financial intervention of N15.5bn for job losses, pay cuts, sustainable professional competency training for members across the country and N30bn economic stimulus for the sector,” he stated.

Also in the hospitality industry, another sector that is closely related to both aviation and tourism, there is palpable fear among operators in Nigeria as the lockdown continues across the world.

Steven Anyanwu, an employee of a popular hotel in Abuja, revealed that the management of the hotel has concluded plans to downsize due to low patronage resulting from the coronavirus pandemic and the attendant lockdowns.

Anyanwu told Business Hallmark that he would not blame the management because since the lockdown began, patronage has been very low.

“Even though I feel bad that some of us are about to be out of a job, the truth is that for over a month now business has been bad. So, how do we get paid if there are no clients, it’s bad for everybody,” he said.

Addressing newsmen recently in Lagos on the impact of the Coronavirus on the manufacturing and other sectors of the economy, the president, Manufacturers Association of Nigeria (MAN), Engr. Mansur Ahmed said the virus was a great concern to the manufacturing sector.

Engr. Ahmed noted that local manufacturers in Nigeria depend on China and other countries for the importation of raw materials saying that the outbreak of the pandemic has halted production in many manufacturing firms in the country.


“As regards to China and the Coronavirus outbreak, yes, the coronavirus is definitely having a significant impact on trade between China and Nigeria currently, which has also affected the volume of trade between China and other countries.

”We are engaging government on this. Obviously, the first thing is to make sure that we are adequately ready and everything is in place.”

Indeed, these are indeed not easy times.



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