Nigeria’s challenging economic climate, a major threat to survival, sustainability of chemical sector – Sunday Bolarinwa, NUCFRLANMPE’s President
The exit of many major multinationals within the chemical sector poses a serious risk to job security for workers in the industry.
According to the President of the National Union of Chemical, Footwear, Rubber, Leather, and Non-Metallic Products Employees (NUCFRLANMPE), Bolarinwa Sunday, the Nigeria’s challenging economic climate, marked by inflation, policy shifts, and a rising cost of living, is a major threat to the survival and sustainability of the sector in Nigeria.
The president shared his insights on the critical issues affecting workers in the sector, lamenting that workers are being impoverished every day.
Since assuming office in September, Bolarinwa has actively engaged with stakeholders to advocate for better working conditions and policies that support both employees and employers.
In this exclusive interview with Daily Sun Workforce, the NUCFRLANMPE boss discusses the union’s priorities, the impact of recent economic policies on productivity, and the strategic steps being considered to navigate these turbulent times for Nigeria’s workforce.
Excerpts:
Settling down as new president
Settling into the role of NUCFRLANMPE president has been both challenging and engaging. It’s a significant responsibility, especially at a time when Nigeria is facing multiple economic challenges that directly impact our members. But I thank God that my predecessors built a strong foundation, which I am now building upon. I will continue with the good work they began. Since my assumption as president in September, I’ve had to quickly get acquainted with key issues and the inner workings of the union, taking time to listen to members’ concerns and learning the best ways to advocate on their behalf. While it has been demanding, I am determined to continue the union’s legacy of protecting workers’ rights and improving their welfare.
Major challenges under Tinubu’s administration
The truth is that workers are being impoverished every day. Under President Tinubu’s administration, we’ve experienced policy changes that have directly impacted our sector. The removal of fuel subsidies and exchange rate liberalisation are major policies that continue to impact our operations. Just recently, the price of Premium Motor Spirit (Petrol) was raised again, and every little increase in the price of fuel adds to the suffering of the masses. The challenges of manufacturing keep increasing because of this. Even Diesel has gone beyond affordability, and exchange rates have been unstable, with the Naira almost losing value daily. Electricity tariffs have also been raised multiple times within a short period.
Although these policy changes aim at economic reform, they have put immense pressure on workers who are already struggling with high costs of living.
Impacts of Inflation on the union
The truth is that the impact is felt across all sectors, not only ours. It has become increasingly difficult for many workers to afford basic necessities, and wage increases agreed upon in past negotiations now fall short of meeting current needs. To address this, we have been negotiating with employers, and around 90-95 percent of them are providing support in the form of food allowances or meal packages. However, these are short-term solutions or relief, which is why we are calling on the government to address the underlying causes of inflation.
Business environment/productivity in chemical sector
The tough economic environment has negatively impacted productivity. Companies are battling high production costs due to inflation, rising fuel costs, high electricity tariffs with low power supply, multiple taxation, and fluctuating exchange rates, among other things, which directly affect the cost of raw materials and equipment. To stay afloat, some companies have had to cut down on work hours or scale back operations, which in turn affects employee morale and productivity levels. We, as a union, are engaging with employers to find cost-saving measures that do not involve reducing the workforce. The goal is to support both companies and employees so productivity can be sustained even under difficult economic conditions.
Forex and high exchange rates
Most of the raw materials we use for production within our sector are imported. The limited availability of foreign exchange and high exchange rates have been crippling our sector. Many companies in the pharmaceutical and manufacturing industries rely on imported raw materials, which are now more expensive due to exchange rate instability. This increase in operational costs makes it challenging for companies to budget effectively or offer competitive prices, as exchange rates can vary multiple times a day. As a result, some companies are scaling down or even relocating their operations to countries with a more stable and reliable FX. The exit of many major multinationals within the industry poses a serious risk to job security for our workers. We are calling on the government to prioritize access to forex for essential industries to mitigate these pressures and safeguard jobs.
Reversing the economic downturn
The government must restrict the importation of certain items that are produced in Nigeria, particularly in the pharmaceutical industry. This will help promote local consumption. It is not every drug that we should be importing. For instance, we still import anaesthetic in large quantities in Nigeria, despite local production of the same drug. The influx of finished products into Nigeria is too much.
As a nation, we should look inward and add value to our raw materials before exportation. For instance, Nigeria is a major exporter of cocoa; rather than exporting cocoa alone, we could refine it into finished products such as chocolate and other by-products. The same goes for our crude oil, which we export and then buy back at exorbitant prices after refinement abroad.
Additionally, we are calling for a manufacturing sector-specific tariff to alleviate production costs. We also demand a review of customs duties on imported raw materials. The government must work on providing basic infrastructure, such as roads, to aid logistics and distribution across the country. Even better, if the rail transport system can be made fully operational, these steps would directly benefit both companies and workers by reducing costs, stabilizing employment, and making essential goods more accessible to Nigerians.
Safeguarding jobs amidst the economic challenges
Upon assuming office, we engaged various stakeholders such as the Ministry of Power and the Ministry of Commerce and Industry. To address power issues, we suggested a special tariff for manufacturing industries that isn’t too exorbitant. While the government’s stance has been to deregulate the power sector and remove subsidies, we emphasize that no nation can survive with the complete removal of subsidies in every sector. Even in advanced countries, there’s some level of subsidy. If they can implement this, the manufacturing industry would thrive. I am sure you would agree with me that no economy can grow without sufficient production. These industries sustain our workers, and it is in their best interests that we advocate for an enabling business environment.
We also focus on securing fair wages and allowances that reflect the current cost of living. The collaboration between us and employers in the sector has been robust. We promote dialogues with employers to encourage transparency regarding their financial situations, which allows us to explore solutions that don’t involve layoffs. For short-term relief, some companies have shown empathy by offering transport and food subsidies to support workers.
Additionally, we are looking at long-term strategies such as reskilling initiatives to make our members more adaptable in the job market, which will ensure they remain valuable to their employers. By advocating for supportive policies and aligning with industry stakeholders, we aim to create a more resilient workforce capable of withstanding economic fluctuations.
Insecurity and workers’ safety
Insecurity remains a significant issue for our members, particularly those in areas prone to banditry and kidnappings. It affects their daily lives and adds a layer of risk to operations. We know that the security agencies have been doing a lot, and there have been significant improvements, but we urge them to do more. This is because insecurity not only compromises worker safety but also raises costs for security measures and impacts overall productivity.
Strategies for navigating economic challenges
Our primary goal is to secure better wage packages that align with the rising cost of living. We’re also pushing for enhanced employee benefits, including healthcare and housing allowances, to improve our members’ quality of life. Another priority is advocating for regulatory reforms that offer special tariffs or exemptions for essential goods in our sector, which would help lower production costs and support workforce stability. By collaborating with other unions, we aim to amplify our voice in policy discussions and drive changes that secure better conditions for workers across the industry.
Beyond that, we regularly organize both internal and external training and retraining programs for our members to keep them in tune with current trends while maintaining relevance to their employers, the sector, and the nation at large. There are also some fresh skill acquisition programs, encouraging our workers to learn and develop various skills to reduce dependency on a single source of income.
There are also some projects in the pipeline that the leadership of the union is working towards. We would equally disclosed the new initiatives when discussions are finalized.
Implementation of Minimum Wage
Beyond what the government is doing in this regard, we have a platform, the National Joint Industrial Council (NJIC), where we negotiate the wages of our members with their employers every two years. Another negotiation will be coming up in April to review the allowances of workers to reflect current economic realities.
