Recession bites harder as job losses hits expatriates in multinationals

As workers in the country continue to experience job losses as a result of the shrinking economy, IFE OGUNFUWA examines the impact of the recession on expatriates employed in the private sector

The wind of redundancy sweeping across the labour force in the country has affected expatriates employed in multinational companies, investigations have revealed.

Unemployment
Unemployment

It was learnt that most of the affected expats, who were majorly citizens of India, China, the United Kingdom and the United States, were employed in the food and beverage sector as well as the oil and gas sector.

According to sources, while some of the expatriates have been disengaged, others have simply been redeployed to the home countries or other nations where the companies are in operation.

As a cost-cutting measure, many employers have embarked on massive sacking of workers, a move which labour unions have vehemently opposed.

Findings revealed that many employers that could not sack their workers resorted to slashing of salaries and/or allowances.

The drop in oil prices and the country’s output has affected Nigeria, whose revenue generation is 90 per cent dependent on oil, adversely impacting its foreign exchange inflow. The scarcity of forex to import raw materials has caused many manufacturers to record low capacity utilisation and reduce their workforce.

A source in a foremost oil and gas servicing company said that 90 per cent of the expatriates in the company had been asked to go in the past year, with the firm said to have saved about 40 per cent of its annual expenses as a result.

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Some employers, who spoke on the condition of anonymity, said that they were forced to declare redundancy on account of the poor state of the economy, adding that the move affected both junior and managerial employees as well as Nigerians and foreigners.

The country officially plunged into recession in August 2016, when the National Bureau of Statistics released the Gross Domestic Product result for the second quarter. The economy shrank by 0.36 per cent in the first quarter and 2.06 per cent in the second quarter. The GDP growth rate weakened to -2.24 per cent in the third quarter and recorded a modest improvement to close the fourth quarter at -1.30 per cent.

An official of an International Oil Company operating in the country said that the expatriation had been going on in the past four years in line with the Nigerian Oil and Gas Industry Content Development Act, 2010.

The Act seeks to increase indigenous participation in the oil and gas industry by setting, among other things, minimum thresholds for the utilisation of local manpower, services and goods in order to stimulate growth of indigenous firms.

However, the source said since there were limited resources to cater to the needs of foreign workers, the quota scheduled to be repatriated in 2016 was increased.

According to the source, transportation, salaries and security expenses on expatriates have greatly reduced.

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He said, “Some of them are redeployed to their countries. Virtually all the oil companies were put on a plan to gradually reduce the number of expatriates and that plan has been on in the last four years, because of the Nigeria local content law.

“Some companies, which had plans to repatriate 50 expatriates every year, increased it to 75 when the recession came. But 50 were actually programmed to leave. This has reduced personnel and logistics costs related to the expatriates. For those on rotation, for example, who fly in every two months, we are not bearing that cost again and for those who need security, we don’t spend on that anymore.”

For ongoing projects, the source said Nigerian workers were made to occupy the vacated positions of the expatriates, while the expats for discontinued projects were simply sent away from Nigeria.

One of the expats who was disengaged in 2016 by Ace Loggers Nigeria Limited, a subsidiary of Sterling Oil Exploration & Energy Production Company Limited, Mahaveer Singh, alleged that the company had dispensed with the services of some foreigners in it employment without regard to the three-month notice stated in their appointment letter.

Singh, an Indian expat, who was recruited in October 2014, was disengaged in May 2016.

However, it was gathered that some IOCs had refused to comply with the local content law and had embarked on the recruitment of expatriates to replace Nigerian workers.

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The Chairman, Petroleum and Natural Gas Senior Staff Association of Nigeria, ExxonMobil branch, Mr. Paul Eboigbe, said that the ongoing separation of workers in Mobil Producing Nigeria Unlimited had not in any way affected the expatriates.

Rather, he explained that more foreigners were brought into the company in the past year to take up the jobs of Nigerian workers, mainly in the security and marine departments of the company.

Eboigbe said, “The separation that is going on started in December last year and the union had been resisting it. It is not concluded yet. They brought in many to the security and marine departments to take over the work of many Nigerian workers. The salaries and allowances of one of them can pay the salaries of 20 workers.

“What is going on now is that they are filling up the managerial positions with expatriates and removing Nigerian managers. We hope it will be concluded amicably and the company moves on peacefully.”

To check the violation of the expatriate quota, the House of Representative had last year directed oil and gas companies applying for expatriate quota to get approval from the Nigeria Content Development Management Board before forwarding their applications to the Ministry of Interior.

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