EVENT : On Friday, 3 June 2016, the Minister for Labour and Productivity, Dr. Chris Ngige, called on Nigerian banks to halt their current spate of lay-offs. In his directive, the minister demanded that "all retrenchments done in the last four months and all proposed ones should be put on hold pending the outcome of the proposed stakeholders' summit for the banks, insurance and financial institutions' employers and employees, slated for first week of July,2016".
MAIN FINDINGS: Nigeria's banking industry is at the vanguard of the perfect storm hitting the domestic economy i.e. acute foreign exchange constraints, low economic growth rates, high inflation and government reform. In response to the damage done to loan portfolios and transaction size/volume, thousands of unfortunate bank staff must now join the ranks of the unemployed.
For instance, last week, Diamond Bank announced a staff cut of 200 personnel. N.B. Diamond Bank recorded a profit-before-tax of NGN6.04 billion (USD30.4 million) for Q1 2016, lower than the NGN7.94 billion of Q1 2015. Similarly, Ecobank reportedly dropped 1,040 staff in recent days (follows a significant slump of N40billion in profits for the bank's parent company, ETI group in 2015). Meanwhile, FBN Holdings, the parent company of First Bank Nigeria, has begun what it called 'gradual reduction' of its workforce by 1000 to cut costs after it recorded an 82% decline in net profits for 2015.
We note that job cuts are still going on (on and off-the news), something that the president of Chartered Institute if Bankers of Nigeria (CIBN), Joseph Olusegun Ajibola, described in a television interview as a 'bitter pill'.
OUTLOOK: This bitter pill will be found in the first aid kit of many Nigerian banks (and even non-banks) as they strive to stay afloat in Q2 and beyond. Others will also be affected as risk appetite dries under the influence of weak oil prices. However, there is hope that over the medium to long-term, agriculture, retail trade and manufacturing can help create more jobs, brighten the economic weather and keep the banks in business. For this to take place, there must first be a realignment of fiscal and monetary policy.
Written by Songhai's Lagos-based Associate Chimaobi Okere with inputs from Songhai's Managing Partners Kissy Agyeman Togobo (Accra) and Nana Adu Ampofo (London)
 Introduction of the Treasury Single Account (TSA) policy
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