The Director General of the Nigerian Employers Consultative Association, Adewale-Smatt Oyerinde, has raised the alarm that the country’s worsening economic problems can lead to retrenchment of workers.
This followed the continuous decline of the naira in the country which affected organisational activities.
Recently, several companies have closed up their businesses in Nigeria, citing economic challenges as a major reason.
Employers are certainly devising new ways of survival amid the worsening economy, while employees are gripped with fear as the fall in the value of the naira renders their salaries worthless.
Speaking with Saturday PUNCH, NECA DG, Adewale-Smatt Oyerinde, said in this time of gross naira depreciation, employers could consider staff reduction as an option for survival.
He noted that the erosion in the strength of the naira tended to shrink the working capital of businesses and lower their volume of output.
Oyenride said, “Once businesses are constrained to lower capacity utilisation and output level due to the dissipation of their working capitals resulting from the gross depreciation in naira value, they (employers) will naturally consider all options available for survival, including staff reduction.
“A significant proportion of businesses in the country depend on imported raw materials and machines; therefore, the erosion in the naira’s value tends to shrink the working capitals of these businesses and lower their volume of output.”
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