35,000 bank workers may lose jobs, says NUBIFIE
By Mojeed Jamiu
Finance Editor
and Victor Ebimomi
Reporter, Lagos
About 35,000 jobs may
be lost in the banking sector if the new capital base is applied as envisaged
by the Central Bank of Nigeria (CBN).
The General Secretary
of the National Union of Banks, Insurance and other Financial Institutions
Employees (NUBIFIE), Mohammed Mamman, sounded the warning at the weekend.
He explained that the
job losses would be the result of mergers and acquisitions among the financial
houses in their bid to meet the December 2005 deadline.
However, CBN Governor
Charles Soludo, who recently said there are no big banks in Nigeria, has
promised that those that are able to meet the N25 billion capitalisation
challenge early enough would be rewarded.
“Through
consolidation, we are offering life where death is inevitable. The unsound
banks are being offered a chance to live and they have 17 months to do
so”, he stated.
As part of the
conditions for bank merger to meet the capital base set by the CBN on July 6,
one of the groups considering that option has worked out a modality that would
shed 20 per cent of its workforce.
Sources close to the
banks confirmed in Lagos at the weekend that it has become inevitable to take
the very tough position if they must meet the challenge.
His words:
“There will be the CBN governor’s distinguished industry leadership
award which would be based on the speed of completion of the consolidation
exercise as well as the successful acquisition of marginal and unsound banks.
“The number of
banks involved in the consolidation exercise will also determine the reward due
to the emerging bank in the consolidation”.
Besides, Soludo said
such an emerging bank would be allowed to play in the foreign exchange market
in addition to having access to the withdrawn public funds.
Soludo, who stressed
that there are no big banks in the country for now because of their low paid-up
capital, explained that “even at N25 billion capitalisation, such banks
would only be able to account for a mere 0.2 per cent of the nation’s
Gross Domestic Product (GDP) of $65 billion”.
In his view, mega
banks or big banks “in the real sense of the word”, should control
60 per cent to 70 per cent of the total economy in terms of capitalisation.
And he reminded
bankers last week that the decision to consolidate the sector is not a forced
merger option, rather, it is meant to prevent 50 banks from going under.
But, in his own
argument, Mamman said: “This bank capitalisation of N25 billion being
introduced by the CBN is not realistic. We are not saying that the CBN cannot
carry out reforms in the banks but the banks are being stampeded into this
policy. From our statistics, 35,000 workers would lose jobs and over one
million people would be thrown into hardship”.
To him, the policy
depicts the banking sector as unhealthy, “a situation which has negative
connotations” for the country’s participation in the New
Partnership for Africa Development (NEPAD).
“This also
signals that the financial industry is not healthy, the psychology of the
workers is now low. The associated hardship is not consistent with NEPAD, which
Nigeria is the initiator and signatory to”.
However, some respite seems to be on the horizon over the
thorny policy as the Senate last Thursday faulted it, saying the CBN should not
apply it across the board. Instead, the Senate categorised banks into mega,
medium and small according to their capital base.
