Tinubu’s Economic Reforms Not Responsible for Closures of Industries – NECA DG

The Director General of Nigerian Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Ayorinde, has stated that President Bola Ahmed Tinubu’s reform of the economy should not be blamed for the number of manufacturing businesses that have shut down their operations in Nigeria and left the country since the second half of 2023.

According to thisdaylive, Ayorinde made this claim yesterday when he spoke to journalists  in Lagos, adding that it is absolutely impossible for President Tinubu to announce a new minimum wage on May 1.   

He said: “It takes more than a year for a business to close shop. Before then, there will be series of events that will constrain the business owners to say that it is time to go. So, it is not a one month or a one year decision.

“Absolutely, their closures cannot be blamed on the reforms of President Tinubu’s administration. Industries like GSK announced their exit last year. You cannot truly ascribe their departures to issues that happened in the past eight months.

“Without speaking for the government, we also know that we were in a deep hole before Tinubu’s administration came in. And if you find yourself in a hole, the first thing that wisdom dictates is to stop digging.

“But that you stopped digging does not mean that you are out of the hole. It also does not mean that your liability is not increasing; it does not mean that the loans you have collected will stop accruing interest.

“If you are unfortunate that the dynamics in global business turns against you and you do not have the backbone and reserves to absorb those shocks they will delay your ability to get out of the hole.

“What we think that the government has done is to progressively start getting us out of the hole.  I think the government has done well within the context of the limitations that we have.

“And while we continue to monitor and share alternative policy options for the government, I think we should give kudos to the government for the extent it has gone.”

The director general of NECA said that it would be an illusion for Nigerians to expect President Tinubu to announce the new minimum wage on May 1, since the process that would culminate to that decision has not been completed.

“It is impossible for the federal government to announce the minimum wage on May 1.  The setting of minimum national wage procedure has a framework. According to Convention 131 of the ILO, there are definitive parameters that should be taken into consideration.

“The social partners, labour, employers and government must meet. We must negotiate and the committee will send its recommendation to the president who will approve or disapprove; amend or disagree on it.

“Once the president agrees, he sends the figure as a bill to the National Assembly, which will look at it and pass it into law.

“At the point where the committee is, all the parties have submitted their recommendation. But the committee has not reconvened to harmonise these figures and forward the same to the president.  So, as of today the president has nothing to approve.

“Peradventure the president announces anything on May 1, it will probably be for the federal workers. But he cannot announce on behalf of the private sector because there is no negotiation that has been done,” he said.