The slippery slope of 500,000 N-Power disengagement amid the COVID-19 pandemic

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The decision of the Federal Government to disengage over 500,000 N-Power recruits has generated different public reactions.

While some have decried unpaid allowances for current recruits, others believe that the layoffs will worsen the unemployment situation in the country.

The fate of current beneficiaries remains unsure.

Even with the plan to hire 400,000 new participants, dumping 500,000 people into Nigeria’s troubled labour market may result in more chaos.

Beyond the immediate hardships of this disengagement on beneficiaries is the slippery slope of adverse multiplier effects.

A direct value-chain distortion might follow the layoffs. Besides, the decision can inspire stringent anti-worker policies in the different sectors of the country.

Already, the pandemic and the associated economic hardship have generated economic crises for many businesses.

Even when structural changes are necessary for government programmes and actions, the timing of this action is problematic.

Particularly, this may set a bad precedence for businesses. Combined with this is the reality that a foremost private business in Nigeria (Dangote Group) recently laid off 3,000 of its staff.

If this persists, a long toil of worker’s retrenchment may not be unexpected.

On the other hand, there is the reality of declining state revenues. Declining federal allocations and the inability of the state to beef up internally generated revenue have contributed to this revenue crises.

This revenue crisis is predicted to impact on state overheads and personnel costs. The fate of many state workers remains unsure in the coming months.

At this critical time, actions of the federal government should carefully underline the associated multiplier effects and the economic dimensions.

Specifically, the federal government should provide requisite leadership for states and the business community. It should demonstrate a true commitment to its economic recovery measures as stated in the newly developed sustainability plan.

The federal government should also encourage states and businesses to develop sustainability measures that will allow for workers protection among other things.

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