E-Financial
Hidden Shame of Contract Workers in Nigerian Banks- Al Jazeera
A report by Al Jazeera has documented the hidden shame of Nigerian banking system where contract staffers in financial institutions live poverty line.
Poverty wages are typical for thousands of contract workers in the banking industry and they can work for years without a raise, promotion, benefits or job security.
According to Al Jazeera, contract staffing has been a feature of Nigeria’s labour market for decades, but it is especially rife in the banking and oil sectors
The report said that for Basit, climbing the corporate ranks of commercial banking in Nigeria has been an exercise in frustration.
The 28-year-old, whose name has been changed to protect his identity, has worked as a teller with Fidelity Bank in Nigeria since 2015.
Six years on, he is at the same branch, working at the same entry-level position, for the same meagre salary of N68,000 ($165) a month.
It is not Basit’s work ethic that is lacking, but the arrangement under which he works.
He is not technically a full-time employee of Fidelity. The entire time he’s worked there, he’s been a contract staffer hired by an employment agency he has never dealt with directly.
Being a contractor means Basit has no upward career path within the bank, or benefits such as insurance, a pension, or a severance package if he’s let go.
If Fidelity’s management is not happy with his services, or they just want to cut expenses, they can let him go when his contract comes up for renewal every two years.
In the meantime, the employment agency siphons off a portion of his pay each month as a “commission”.
Fidelity Bank did not respond to Al Jazeera’s request for comment. But Basit’s story is far from unique.
More than 42 percent of the bank workers in Nigeria were contract staffers as of the third quarter last year, reports the National Bureau of Statistics.
The remainders are full-time employees with banks – roughly a third of who are senior staffers.
Though unionists and government officials say the issues surrounding contract bank workers are being addressed, solutions have been slow to come.
And until they do, there are few employment options for the banking sector’s largely youthful contract workforce to explore.
More than 42 percent of bank workers in Nigeria were contract staffers as of the third quarter last year, reports the National Bureau of Statistics.
Profits before workers
Basit often thinks of quitting his job as a bank teller.
But there are few prospects for him in Africa’s largest economy.
Nigeria’s official unemployment rate rocketed to 33.3 percent in the final three months of last year – the highest on record and among the highest in the world.
Over half of the country’s roughly 70 million-strong labour force was either jobless at the end of last year or not working a full-time job.
That jobs deficit has made it an employer’s market, leaving workers virtually powerless to negotiate – let alone demand – better terms.
In Basit’s case, that means punishing 10-hour days that leave him little time to even explore the few opportunities which may be available to him.
‘’The challenge is that you barely have the time to go search for a job elsewhere,” he told Al Jazeera.
“You leave the house as early as 5 or 6am and you get back by 6pm or so. How do I get back as tired as this and I still start searching for job opportunities when I know that there are only few?’’
Contract staffing has been a feature of Nigeria’s labour market for decades, but it is especially rife in the banking and oil sectors.
Over half of Nigeria’s roughly 70 million-strong labour force was either jobless at the end of last year or not working a full-time job.
For Nigeria’s unionists, the so-called “casualisation” of these workers is the result of financial institutions carving out bigger profits at the expense of labour rights.
“Generally, outsourcing, as far as labour is concerned, is an exploitative system,” said Comrade Sheikh Muhammed, national general secretary for the National Union of Banks Insurance and Financial Institution Employees (NUBIFIE).
Retired bank manager Abolarian Aderemi worked in banking for more than 30 years. He says the plight of contract workers is the result of poor government oversight.
“They are exploiting Nigeria’s poor leadership,” he said. “Labour union has been kicking against it, but nobody listens.”
Muhammed says contract workers face serious hurdles to joining or forming unions where they can collectively bargain for better pay and conditions.
“[Banks] take on casual workers in order also to make sure they confuse the identity and status of the worker so that they will not be able to exercise their right of belonging to anyone,” he told Al Jazeera.
The government has established a committee to review the myriad issues surrounding contract workers in the country’s banking sector. But its efforts were disrupted by the coronavirus pandemic, Nigeria’s Minister of State for Labour and Employment, Festus Keyamo, told Al Jazeera.
“We want to review the whole issue regarding casualisation of workers with the banks and we are also in the process of reviewing all the labour laws now,” he said.
Muhammed said the review should help crack down on labour abuses.
“By the time the review is signed into a working document, no outsourcing will be done [in the banking and insurance sector] without consulting the union and taking cognizance of workers as reflected in the Labour Act,” he said.
A jobs deficit has made it an employer’s market in Nigeria, leaving workers virtually powerless to negotiate – let alone demand – better terms.
Young and exploited
While Nigeria has rules that govern working conditions for full-time staff, the law does not specifically address “triangular employment’’ that covers workers hired through employment agencies.
‘’From the legal perspective, there is nothing illegal about having contract staff; it is a function of contract,” said Waleey Fatai, a Lagos-based labour lawyer.
“From the moral perspective, [it is an issue of] half a loaf is better than none,” he told Al Jazeera.
NUBIFIE’s Muhammed says the problem is not how the current laws are worded, but that employment agencies are falling afoul of it.
“The Labour Act that regulates the relationship did not exempt you because you are a secondary provider of employment,” he said. “It is part of the things we capture in this memorandum of agreement we just worked on.”
But not all contract workers may even be aware of their rights. Many employment agencies look for entry-level candidates in their early 20s with an Ordinary National Diploma (OND), the lowest tertiary degree in Nigeria awarded by polytechnics after a two-year programme.
A higher degree may even work against a job applicant.
Thirty-eight-year-old Ukamaka Olisakwe worked in two banks as a contract staffer between 2008 and 2014 in Nigeria’s east.
She told Al Jazeera the first bank that employed her told her to list her OND on her application but omit her more prestigious Higher National Diploma (HND) – a four-year degree that equates with a bachelor’s degree.
‘’I think they found a loophole in the academic system,” Olisakwe told Al Jazeera.
She said her first bank paid her a meagre base salary of N25,000 a month [$61] plus commission, and assigned to her work in the sales department where she was given performance targets including opening five to six new accounts daily, and generating monthly cash deposits often totalling millions of naira.
“The target heaped on the back of the workers was nasty, unbelievable, [and] mind-bending and if you are unable to meet [the performance targets], you won’t get your commission,’’ she said.
Olisakwe left that job and took a contract position with another bank where she worked in the customer service office alongside full-time, core staff.
‘’It is the same job function that I was doing with the core staff, only that I could not approve account openings,’’ she said.
But her odds of gaining an equal footing with the full-timers were slim.
In order to parlay a contract job into a full-time staff position, workers must take a conversion exam. But few are invited to take the test.
‘’Conversion rarely happens. They will only hand-pick some people,” she said.
Olisakwe finally quit the sector, worried that even if she did manage to convert a contract job into a full-time position, she would eventually fall victim to age discrimination.
“You know polytechnics churn young people every year and when they come for training, the banks retain them to replace the older staff,” she said. “It is cheaper.’’
Mr. Olayemi Cardoso, governor, Central Bank of Nigeria (CBN), on Friday disclosed that the ‘Early Exit Program’ was 100 percent voluntary exercise initiated by the staff of the apex bank.
Mr. Olayemi Cardoso, governor, Central Bank of Nigeria
Mr. Cardoso disclosed this in Abuja during the resumed investigative hearing into the payment of N50 billion terminal benefits to the 1,000 staff of the apex Bank, held at the instance of the Ad-hoc Committee chaired by Hon. Usman Bello Kumo.
The CBN governor who was represented by Mr. Bala Bello, deputy director, Corporate Service, CBN, argued that “nobody has been asked to leave, and nobody has been forced to leave. It’s a completely voluntary programme that has been put in place.”
He maintained that the “Early Exit Program and the Restructuring as well as Reorganization are basically ways and means through which the performance of an organization is optimized by putting, ensuring that round pegs are put in right holes. The manpower requirement of the bank is actually met.
“The manloading, which is the key responsibilities, key performance indicators of the bank, vis-a-vis the number of people driving the performance of that bank, is at a level where it’s optimum, balancing the human resource requirement, the capital requirement, the skill requirement, as well as the IT requirement of the bank.
“You are very much aware, Chairman, the entire world is going through a process of digitizing its operations. And then once that is done, a lot of opportunities are created, just like a lot of redundancies are also equally created.
“And you have had instances in which, in the past, the request for staff to actually exit the bank voluntarily actually emanated on the part of the staff. And I believe Central Bank is not necessarily the first organization to have done that. I’m very happy to mention, Mr. Chairman and members of the committee, the early exit program of the Central Bank is 100 percent voluntary. It’s not mandatory. Nobody has been asked to leave, and nobody has been forced to leave. It’s a completely voluntary programme that has been put in place.
“I believe several organizations across the world, and even within this country, both in terms of the private sector and the public sector, are undertaking similar exercises. So nobody has been asked to leave. But people who are based on popular demand, I have to be humble, with a lot of humility, to tell you that this same program that is taking place is not at the instance of the bank itself.
“Of course, we have our own challenges, and we know where we want to take the bank to. That’s Cardoso and his team, myself included. But this popular request actually came from the staff.”
According to him, “In the past, you have had instances in which cases of stagnation and lack of career progression appears. I mean, in an organization, you’ve got a pyramid where from each level to the next level, you know, the gap keeps narrowing. If not, you are going to have like a quasi-organization, inverted pyramid.
It doesn’t work. It gets to the level where you have, for example, 30 departments in the Central Bank. You cannot have 60 directors, manning 30 departments. It’s not going to work. So, once those vacancies are filled, it gets to a level where some people, even though they are very qualified, they are very able, and they are very willing, but the vacancies are not there. And then they got to a level where they are stagnated for a period of time.
“There are several instances in which similar exercise took place in the Central Bank, which has happened several times. This is not the first time. It’s not the second time. It’s not the third time. It’s several times. You’ve had instances in which people at the top request that, look, it’s going to take me X number of years to actually aspire to become a director in an organization. But right now, there’s no vacancy. And the person sitting next to me probably has eight years to go. Meanwhile, I have seven.
“So there’s no career growth. And a lot of opportunities are out there. For example, among the people that have left, there are, like, three or four people who are going to set up a bank.
“The approach that we told them, literally, anything you want to do, if you need the support of the Central Bank, you are done. So the popular demand then was at the top, people that are stagnated, people that don’t have any career progression any longer, they have reached their peak, and they are willing to go and take other risks before they get to an age where they become scared to take risks.
“You know, those programmes are actually put in place to ensure that those people are given an opportunity to actually, you know, exit to go and start other things with their lives.
“But in this particular case, based on popular request, and I came with the Union Leader of the bank, the staff requested that in this case, similar opportunity should be extended to other categories of staff. In the entire system, in the entire period, in the entire time that similar exercise has taken place, it’s only people within a certain cadre, within the director cadre. The deputy director, directors who feel they want to go and start some other things, and assistant directors are given.
“But for the first time in the over 60 years history of the bank, the early exit program is extended to everybody who is actually willing to take it. And this came at the instance of the staff. So it’s not mandatory, it’s not compulsory, there’s no coercion, there’s no forceful exit, and there’s no intimidation for anybody to take it.
“In fact, when this same thing has been, you know, approved, was approved by the bank, and it was open, the number of staff that actually came forward to take it was even very amazing. Like I told you, there are some other people that are even thinking of going to start with the bank. So if the impression comes to this place that we are laying off, nobody is going to do this. It’s the line of anybody. Nobody did it. It’s an entirely voluntary exercise on the part of the bank.
“Those who want to take it, took it, and those who don’t want to take it are still in the bank.”
Speaking further, the CBN helmsman maintained that the Early Exit Program and the Restructuring as well as Reorganization are “all about optimization and making sure that the organization, vision, and mission is aligned with the manpower you come in, considering the manloading.
“The manloading is how many people does it take to do a particular job, and how many hours do you need to put. For example, if you are going to spend 40 hours, and you have like 10 people to do two jobs, well, it doesn’t hurt anybody. These are Nigerians, if they are there, they don’t hurt anybody. But there are people who are actually voracious. They want to do more.
“These are the people who feel that if we have this opportunity, we can go and start all that. And it was absolutely going to, and you can call me anytime, anywhere, and that’s what it is. Nobody has been forced to leave. Nobody has been dictated to leave. Nobody has been stamped into leaving at all. It’s strictly voluntary.
“If nobody had taken it, we would have just closed it. But this came as a result of popular demand. Like I said, I came with a representative from the staff unit to actually say it here.”
Speaking earlier, Chairman of the Ad-hoc Committee, Hon. Usman Kumo who assured that the Ad-hoc Committee will be fair to all the parties involved in the investigation, noted that the Committee’s responsibility is to submit the report to the House.
He said: “Let me start by saying that the House of Representatives, the 10th National Assembly, understand that CBN is implementing the Restructuring, Reorganizing and the Early Exit Program. I don’t know whether the CBN Governor can explain or brief this committee the objectives of the Restructuring, Reorganizing and the Early Exit Program to this committee.
“And two, can you explain the Early Exit Program and what you intend to achieve with it? When it starts, when it will end, and what is the connection? Between the Reorganization, Restructuring and the Early Exit Programme,” the House Chief Whip inquired.
After the CBN Governor’s presentation, Hon. Kumo asked: “What is the connection between this exercise, this early exit exercise, and the one you embarked on between March and May, where you lay off about 300 staff from the CBN? Is it part of this?”
While responding, Mr. Cardoso said: “The two exercises are actually different. Whereas the exercise that you are mentioning, people were, nobody was actually terminated or dismissed. People were retired with their full benefits. For us to have opportunities to reinvigorate and bring in new blood or new perspectives to how things are done. So that was, at the instance of the bank, people were actually retired with their full benefits.
“This one that is taking place, or is taking place now, because it actually closes by the end of the year, which is just on Tuesday, is strictly voluntary.
“So, there are two different things altogether. But if you take the two together, and you juxtapose it within the context of the overall strategy to streamline the operations of the bank, to refocus the operation of the bank, to reinvigorate the operation of the bank, to re-energize the operation of the bank, you can take the two together as leading to the same objective.
“Whereas one, people were retired with their full benefits. The other was actually absolutely voluntary,” the CBN helmsman explained.
Bankit MFB, an emerging financial institution in the Nigerian financial sector, has unveiled its innovative web banking platform to provide customers with an additional digital channel to manage and carry out uninterrupted daily transactions on their phones, laptops and other devices.
With this innovative solution, Bankit MFB said it is redefining convenience and security in banking, ensuring uninterrupted access to financial services, time saving functionalities, efficiency, real-time account updates, 24/7 availability, and faster transactions.
Yen Choi, chief executive officer, Bankit Africa, in a statement said, “In today’s fast-paced digital age, connectivity is everything in banking, and for us, it’s all about improving customer experience with simple banking options and empowering our teeming customers to live their best lives.”
“We are revolutionising the Fintech landscape in Nigeria, and we have developed this solution to empower our customers to bank securely, anytime, anywhere, conveniently.
We are committed to leveraging technology to enhance the banking experience for all our customers.”
With the introduction of its web banking platform, Bankit MFB is breaking barriers and empowering individuals and businesses to manage their finances with confidence.
Speaking further, Choi said, “Bankit’s web banking platform reaffirms one of the bank’s core values – Innovation and sets a new standard for accessibility and security in the banking industry.”
World Bank has just released $1.5 billion loan to Nigeria, less than six months after approval.
This is in support for the Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing initiative.
The loan, approved on June 13, 2024, was released in record time following Nigeria’s implementation of critical reforms, including the removal of fuel subsidies and comprehensive tax policies.
This fast disbursement contrasts with other loan programmes, which typically experience delays due to slow or partial implementation of conditions.
For instance, the World Bank has also disbursed $1.88 million of a $750 million loan for the Accelerating Resource Mobilization Reforms (ARMOR) project, approved alongside the RESET programme.
The first tranche of $750 million, a credit facility under the International Development Association (IDA) with a 12-year maturity and six-year grace period, was disbursed on July 2, 2024.
The second tranche of $750 million, issued by the International Bank for Reconstruction and Development (IBRD) with a 24-year maturity and 11-year grace period, followed in November 2024.
The World Bank document read: “This document summarizes the progress made under the Reforms for Economic Stabilization to Enable Transformation Development Policy Financing for the Federal Republic of Nigeria (Borrower or Recipient), which was approved by the Executive Directors on June 13, 2024.
“The DPF is a standalone operation comprised of two tranches: (1) first tranche comprising US$750 million credit from the International Development Association (Association) (Shorter Maturity Loan terms with 12-year maturity and grace period of 6 years, Credit No. 7567-NG); and (2) second tranche comprising US$750million loan from the International Bank for Reconstruction and Development (Bank) (US dollar-denominated, commitment-linked loan with 24-year maturity and grace period of 11 years, Loan No.9683-NG). The Financing Agreement and Loan Agreement were signed and declared effective on June 19, 2024 and June 26, 2024, respectively. The first tranche was released on July 2, 2024.”
A major trigger for the second tranche was the removal of fuel subsidies.
The reforms allowed petrol prices to reflect international market rates and exchange rates, effectively ending implicit subsidies that strained public finances.
The deregulation, which began in mid-2023, saw petrol prices increase more than fivefold, drawing praise for fiscal discipline but sparking criticism over the rising cost of living.
The World Bank commended the government for not only meeting the condition but exceeding expectations by fully deregulating the fuel market.
The document noted: “In terms of implementation, while the TRC [Tranche Release Conditions] formulation required introducing the change over a specified time-bound implementation period, the Borrower has moved ahead and made the change immediately, thereby overachieving the TRC in this respect.
“Effective October 2024, the price of PMS has been determined by the international market and the exchange rate set by the Central Bank of Nigeria.
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