Nigerian banks started trimming of staff to suit the economic situation. Last week, two banks, Ecobank and Diamond Bank sacked over 1060 staff citing economic downturn as reason for the cut . . .
Reports say the recent sack has increased the number sacked bank workers in the banking industry in the past one year to about 8,500.
The federal government through the Minister of Labour and Employment, Dr. Chris Ngige, intervened and requested the banks to stop the sacking for now. Whether the banks have stopped sacking according to government’s request is open to conjecture.
Reports indicate that there are 7 major reasons why the banks’ are sacking, below:
1. The fall in global oil prices by nearly 60% from $115per barrel to about $44 per barrel in nearly 2 years, thus resulting in lower government revenues, thereby decreasing bank deposits.
2. The introduction of the Treasury Single Account (TSA) triggered the withdrawal of about N2.9 trillion of government funds from the banks and moved same into the Central Banks of Nigeria (CBN) vaults.
3. Nigerian banks are also faced with significant pressure from the abolition of commissions on turnover (COT), which came into force on January 1, 2016.
4. The Economic and Financial Crimes Commission (EFCC) has beamed its searchlight on the banks, leading to the arrest of some bank CEOs.
5. The banks are under allegations that they helped the Jonathan administration to launder public funds of over $115m into private pockets. As a result, some banks were forced to return some undisclosed amounts of money to the federal government.
6. The worsening foreign exchange crisis in the CBN, banks and the parallel market.
7. The current galloping inflation in Nigeria.