Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

MASS SACK IN BANKING SECTOR: Workers Must Struggle To Reclaim Their Unions and Fight Back

MASS SACK IN BANKING SECTOR: Workers Must Struggle To Reclaim Their Unions and Fight Back

By Chinedu Bosah

Similar to Joseph interpretation of Pharaoh’s dreams – a crisis period coming after a boom period and the need to prepare ahead – smaller and less viable banks have taken over more viable banks. Intercontinental Bank was taken over by Access Bank; Oceanic Bank by Ecobank, First City Monumental Bank (FCMB) took over Fin Bank. Afribank, Bank PHB and Spring Bank were “nationalized” as Mainstreet Bank, Keystone Bank and Enterprise Bank respectively. The books of Oceanic and Intercontinental banks showed that they had more assets, deposits and market capitalization than the banks which have acquired them. They were toasts of investors and won many ‘international awards’.

After the bank consolidation exercise of 2005 which saw merger and acquisition among banks (the number of banks reduced from 89 to 25) in order to raise minimum capital base from N2bn to N25bn and until 2008, the Nigerian banks witnessed a period of boom. The bank shares were hot cakes among speculators and those who were lured into stock market gambling as a means of making fortune in an ailing economy. The bubble burst and many lost their life’s investment as the stock market collapsed. Some bank chiefs, who might have fallen out of favour with the government, have been sacrificed and arraigned before courts. However, this is not for the role of the banks in the collapse of the stock market but for different frauds including doctoring the books and helping themselves with depositor funds. One of them, Cecilia Ibru of the Oceanic Bank, who has been convicted, was only made to forfeit a fraction of her loot. But bank workers and most bank customers were not that “fortunate”, they have been made to pay more for the crisis caused by frauds and greed of the bank chiefs.

On January 27, 2012, the management of Access Bank sacked about 1,500 workers of Intercontinental Bank. A few days after Ecobank sacked over 1,250 workers while Enterprises Bank also sacked 140 staff. Hence, over 10,000 workers have lost their jobs in the banking sector since 2009. Access Bank Group Managing Director, Mr. Aigboje Aig-Imokhuede attributed the mass sack on over-bloated workforce, redundancy and the need to make the bank more financially sound. The facts on ground suggest the contrary. The workforce that is claimed to be over-bloated has been over-worked since they were employed. It is no news that bank workers work longer hours than expected. Usually, the capitalist establishment will make the general public and workers pay for the mess created by top bank chiefs and their collaborator-friends (some of them in government). As at today, over N1.3 trillion of public funds have been invested in the ailing banks. But to cut cost, workers have been massively sacked. Besides, the nationalized 3 banks that got a combined sum of N679 billion from public resources were only to be “stabilized” and handed back to private shacks.

Banks were in the past and are still being run like a casino. In Nigeria the so-called finance industry is based upon recycling oil revenue which has often been previously looted. On top of that speculators may move money in and out of the country and individual companies in the hope of making a quick profit. Banks hardly give loans to industries except where the top bank chiefs have interest and these were mostly loans issued without the intention to pay back. The small and medium scale industries are scared away by outrageous interest rates. Having been in business just to make profit and not for development, unlike what we have been told, banks are not prepared to risk their money, considering also the growing cost of doing business as a result of absence of basic infrastructure.

One factor that contributes to the collapse is the profligacy of the bank chiefs. Some of the top bank chiefs in the banking industry were paying themselves up to $500,000 as corporate bonus aside N100 million yearly salary couple with periodic first class holiday tickets and business class for family members. The bank chiefs have dwarfed entertainment stars and celebrities in the use of jets and bullet-proof cars costing billions of Naira. These banks also embark on publicity stunt such as paying for favoured ratings and unwarranted adverts that gulps hundreds of millions of naira.

Some banks have also asked the workers to accept lower wage as a condition to remain in the workforce. This is one of the tactics at driving down workers wage while top management staff earn jumbo salaries and enjoy several other perks.

At present, just a fraction of the entire loans have been gotten back despite EFCC investigation, arrest and prosecution of some of the bank chiefs. Rather than going after all the debtors, some of them were asked to pay part of the loans for the whole debt. In December 2009, the then Intercontinental Bank Plc granted N31.134 billion waiver to 15 of its customers who collectively owed N59 billion. While workers have to be sacked and tax-payers money used to bail out the banks, the bank chiefs and big private collaborators smile with their loot.

Aig-Imoukhuede, CEO of Access Bank, claimed that the merger of banks has repositioned the Nigerian banking sector on the African continent. Merger alone cannot reposition the banking sector, the notion that the bigger the better may not necessarily be correct. Yes, the bigger the company, the potential for growth, but there is no guarantee that growth is sustainable given the corruption and waste. Prof. Soludo said as much when he introduced bank re-capitalization in 2005 as the Governor of the Central Bank. There was even assurance that the consolidation would shield the banks from crisis. Three years after, it became obvious that the so-called big banks were in serious crisis.

Unfortunately, the trade unions in the banking sector (Association of Senior Staff of Banks and Financial Institutions (ASSIBIFI) and the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE)) have closed their eyes to the mass sack and attacks on workers in the industry. In fact, in some cases, the union leadership assisted in these attacks. For example, National President of ASSIBIFI, Mr. Sunday Salako acknowledges that the three banks that recently retrenched workers contacted the union and reached an agreement with the union on the mass sack. The union leadership connived with the management without prior discussion with the workers, and yet they claim to be representing workers. This to say the least is absurd and callous. This is a union leadership that is hardly seen defending workers’ rights while most workers have little or no knowledge of who represent them as union officials. These union leaders remained silent when bank chiefs ran these banks aground and could not offer a clear alternative to the present rot. The bank workers must understand that the struggle should not be limited to few demonstrations when mass sack was carried out, but being active in the unions to rebuild and reclaim the unions where bureaucratized union leaders who are hell-bent on mortgaging the interest of workers for personal gains will have no place to exist. Where unions have not been established, workers must struggle for it and use it to defend their interest.

On the basis of capitalism, where banks are established for the profit-first interest and greed of the few as against development of economy no measure can guarantee banks to exist in public interest. Only nationalization of big banks and placing them under democratic control of elected representatives of workers and depositors can make them to truly serve as the vehicle for development which includes growth of industries, expansion of infrastructure and creation of decent jobs. Like the failed consolidation exercise has proved, any other measure can at best bring a momentary relief.