Nigerian banks experienced the largest drop in contract staff employment since 2015. This is according to the latest banking sector report of the National Bureau of Statistics (NBS).
The report reveals that in the 3 months ending September 2019, the number of contract staff across Nigerian banks reduced by 3,083, dropping from 46,263 in June 2019 to 43,180 by the end of September 2019.
Bank staff: As of the end of September 2019, staff across Nigerian banks dropped to 101,435 from 104,364 in June.
- The breakdown of the data shows that executive staff rose to 186 (less than 1%), junior staff rose to 40,396 (40%) while senior staff dropped to 17,671 (17%) and contract staff also dropped to 43,180 (43%).
- Senior and contract staff declined, while the executive and junior staff rose slightly between Q2 and Q3 2019.
- Junior and contract staff now make up a combined 83% of banking sector employees.
Contract staff down by 6.6% in 3 months
Despite the drop in contract staff hiring, the data also indicates Nigerian banks continue to rely heavily on them for their operations, preferring full staff for core relationship management, treasury, and middle to senior management operations.
- From a mere 20,576 in 2016, contract staff numbers have more than doubled, both as a percentage of total staff and in absolute terms.
- However, contract staff witnessed a big decline for the first time a surprise drop considering its recent spike.
- The 3,083 is the largest decline in about 4 years.
- Despite the drop, contract staff remains the largest staff category, accounting for 43% of total banking employees.
Why the big drop in contract staff? : Financial expert and CEO, AfriSwiss Capital Assets Management Limited, Kalu Aja, stated the following:
If you divide 3,100 by 24 banks, it is about 129 per bank. 130 staff lost to say Zenith or UBA is less than 1 per branch. In perspective, not a lot but the key is to watch the trend. The real red line is if you see banks letting middle and top management go.
Contract staff by definition are “short term” to fill gaps in staffing. The drop in contract staff may not be as a result of technology, as technology does not reduce some roles for contract staff.
However, the Chief Economist for Businessday, Nonso Obikili, is of the opinion that technology may have triggered the fall. He gave further analysis.
“I think it is a technology play as banks migrate to more technology-driven platforms that require less casual labour. It may also be good to look at the full-time tech hires as that may be offsetting the reduction in casual contract staff.
Meanwhile, this is not a red flag to the economy as the financial sector employment is a very small share of total employment.”
Also weighing in, financial expert and founder of Nairametrics, Ugodre Obi-Chukwu, explained it in detail.
“I think it’s too early to determine if it is technology or not that triggered the fall. However, banks have continued to review their operations in line with their cost to income ratio targets. This could require the closure of branches or alignment of operations. The big merger between Diamond Bank and Access Bank could also have been a major factor.
“I don’t think it’s a red flag for the economy. Even though the banking sector is one of the largest employers of labour in the country, their employment numbers are often cyclical as I expect them to hire again by early 2020.”
Job creation: Despite the improved technology adopted by banks for their core operations, banks are expected to continue their reliance on contract staff strength for their banking operations.
- Whilst banks have been criticized in some quarters for their use of contract staff, it remains a major source of employment for over 500,000 graduates churned out by Nigerian universities annually.
- Contract staffs are often paid between N80,000 and N200,000 monthly depending on their function within the bank. Payment also ranges across commercial banks.
- Interestingly, last Wednesday, a lawmaker in the House of Representatives Amobi Akintola moved a motion at the plenary session calling on banks to convert their contract staff to permanent staff.
Adopting the motion, the lawmakers called on commercial banks “to convert their casual staff who are handling core operations to permanent staff without further delay.”
In all, whether the banks would consider the request of the lawmakers, depends on the objectives of the financial institutions.
NNPC says local operators must improve capacity to achieve low cost of oil production
The NNPC has mandated local oil companies to improve capacity to so as to reduce oil production cost.
The Nigerian National Petroleum Corporation (NNPC) has said that indigenous companies operating in Nigeria’s oil and gas sector must upscale their capacity for global competitiveness in order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis.
This was disclosed by the Group Managing Director of NNPC, Mallam Mele Kyari, at a virtual stakeholder’s consultative summit which was organized by the Senate Committee on Local Content.
According to a press release by NNPC, which was signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the NNPC GMD said that there was need to amend the Local Content Act to reflect current realities in the industry.
Kyari, who was represented by the Group General Manager, Corporate Planning & Strategy (CP&S), Mrs Eyesan Oritsemeyiwa, argued that there was a need to have a legislation to resolve the issues of funding challenges faced by local players, stressing that oil and gas business required high technical skills and competence to compete favourably at the global stage.
Speaking further on the need for greater capacity building on the part of indigenous companies, the GMD said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.
He said, “In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with. People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting a good replacement for them from the educational sector when they grow old and retire, then your industry will collapse,”
The NNPC boss pointed out that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.
He praised the National Assembly’s initiative to review and amend the Local Content Act and urged the committee to ensure that it is carried out in a timely fashion in order for the law to deliver maximum value for the nation.
The GMD commended the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, stressing that it would open up the non-oil sectors to growth and development.
The local content initiative has been identified as being very critical to the development of Nigeria’s oil and gas sector as the Federal Government plans to reduce the cost of production of crude oil to $10 per barrel in the face of the recent crash in crude oil prices.
The Federal Government has provided the sum of $350 million as the Nigerian Content Intervention Fund to help support local participation in the oil and gas sector.
Local Content: @NNPCgroup Advocates Capacity Upgrade for Indigenous Operators
In order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis, @NNPCgroup says indigenous companies operating in the…
— NNPC Group (@NNPCgroup) September 26, 2020
NNPC signs gas development and commercialization deal with SEEPCO
NNPC and SEEPCO have signed a gas development and commercialization deal.
The state oil giant, Nigerian National Petroleum Corporation (NNPC) has signed a gas development deal with Sterling Exploration and Energy Production Company (SEEPCO).
The agreement between the 2 oil firm is for the development and commercialization of gas from Oil Mining Lease (OML) 143 that could help reduce gas flaring in the country.
The disclosure was contained in a press statement that was issued by the Group General Manager, Group Public Affairs Division of NNPC, Dr Kennie Obateru, on Saturday, September 26, 2020, in Abuja.
According to the statement, the Group Managing Director of NNPC, Malam Mele Kyari, while speaking at the agreement-signing ceremony which held at the NNPC Towers, described the execution of the deal as a great milestone as well as a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.
Kyari disclosed that the deal would not only help reduce gas flaring and its environmental hazards but would also promote gas production and utilization in the domestic market.
The NNPC boss also commended SEEPCO for its unwavering commitment to gas development and commercialization in the country which has led to the establishment of a Special Purpose Vehicle that will help expand gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.
On his part, the Chairman of SEEPCO, Mr Tony Chukwueke, described the deal as an essential partnership that would help the company fulfil the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetizing it.
He commended NNPC and the Group Managing Director for ensuring the execution of the agreement which he described central to the achievement of the company’s cardinal objective of boosting the production of Liquefied Petroleum Gas (LPG), condensate and dry gas for the Nigerian market, adding that the company has invested about $600 million for that purpose.
This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.
Buhari reappoints 3 Chief Executives of agencies under Federal Ministry of Petroleum
3 Chief Executive Officers of agencies under the Federal Ministry of Petroleum Resources have been reappointed.
President Muhammadu Buhari has renewed the appointment of 3 Chief Executive Officers of parastatals under the Federal Ministry of Petroleum Resources with immediate effect.
The appointments that were renewed by the president include that of Dr Bello Aliyu Gusau as the Executive Secretary of Petroleum Technology Development Fund (PTDF), Ahmed Bobboi as the Executive Secretary/Chief Executive Officer of Petroleum Equalization Fund (PEF) and Simbi Wabote as Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB).
The disclosure was made through a series of tweet posts by the presidency on its official Twitter handle on Friday, September 25, 2020.
The statement disclosed that the renewal of the appointments followed recommendations to the President by the Minister of State Petroleum Resources, Timipre Syla.
It stated that Dr Aliyu Gusau was credited to have run the PTDF successfully in the past four years, keeping faith with the Seven Strategic Priorities he had introduced in January 2017.
These are Domestication, Cost cutting, Sustainable funding, Efficient internal processes, Linkages with the industry, Utilization of centres of excellence, and Pursuit of home-grown research.
It also stated that Bobboi got his reappointment for having run PEF in a way that made it a key and strategic player in the administration’s oil and gas reforms, especially in stabilizing the supply and distribution of petroleum products across the country, among others.
Going further, it stated that the NCDMB boss, Wabote, won his pips for managing the NCDMB and completing its headquarters building. Wabote was also credited to have initiated many landmark projects that were widely commended by industry players.
STATE HOUSE PRESS RELEASE
PRESIDENT BUHARI RENEWS APPOINTMENTS OF PTDF, PEF, NCDMB BOSSES
President @MBuhari has renewed the appointments of Chief Executive Officers of agencies under the Ministry of Petroleum Resources.
— Presidency Nigeria (@NGRPresident) September 25, 2020