- Job Losses Extend to Expatriates in Multinationals
The wind of redundancy sweeping across the labour force in the country has affected expatriates employed in multinational companies, investigations have revealed.
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.
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.
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.
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.
Eat’N’Go Expands To East Africa, Projects 180 Stores By Year End
In a bid to further extend its tentacles beyond the West African market, Eat’N’Go limited, one of the leading Quick Service Restaurant (QSR) operators in Nigeria and master franchisee for world-class food brands – Domino’s Pizza, Cold Stone Creamery, and Pinkberry Gourmet Frozen Yoghurt, announced its expansion into the East African market.
This development comes after the successful acquisition of the franchisee which operated Cold Stone Creamery and Domino’s Pizza in Kenya. This acquisition will see Eat’N’Go limited become the largest Domino’s pizza and Cold Stone Creamery Master Franchisee in Africa with operations in Nigeria and Kenya.
Since its entrance to Nigeria in 2012, the QSR company has grown exponentially and has continuously nurtured the drive to extend its footprint across the African market. This acquisition provides them their first foreign market expansion, making them a Pan African company with a total number of 147 outlets across Africa and a projection to reach 180 stores by end of 2021.
Group Chief Executive Officer and Managing Director Eat’N’Go Limited, Patrick McMichael said that expanding into East Africa represents a very exciting time in the growth of the organization and also a strategic investment for the firm and its stakeholders. “Over the years, we have fostered the mission to not just bring the best QSR brands to Africa, but to directly impact on Africa’s economy and we are glad we are finally on the way to making this happen. Studying the growth of the Kenyan market in the last couple of years, we are convinced that now is the time to extend our footprint into the country.”
“We are very thrilled about this expansion as this move avails us more opportunity to provide Jobs to more Africans, especially in times like this. We remain thankful to all our customers, partners, and stakeholders who have supported us this far and we are more than ready to strengthen our dedication in satisfying the needs of our customers” Patrick added.
Eat’N’Go has over the years maintained its position as the leading food franchisee in Nigeria. As it expands its presence to other parts of Africa, the organization also places a strong focus on the quality of its products and services of all its three brands. The expansion to this new region is in line with the company’s plan to reach 180 stores across Africa by the end of 2021.
The milestone achievement and development will better position the company in its contribution to Nigeria and Africa’s economy. Currently home to over 3000 staff members across Africa, the company is committed to continuously provide job and business opportunities across the continent.
Eat’N’Go launched in 2012 in Nigeria with the vision to become the premier food operator in Africa. Today, the company has over 147 stores in Nigeria and Kenya and it continues to deliver on this promise by successfully rolling out the globally recognised brands Cold Stone Creamery and Domino’s Pizza across Africa. The company continues to expand its presence in key markets by fusing company goals with new strategic development goals and is projected to reach 180 stores across Africa by end of 2021.
Shoprite Exit: LCCI Explains Challenges Hurting Business Operations in Nigeria
Following the recent announcement of Shoprite, a leading South Africa retail giant, that it is leaving the Nigerian market due to harsh business environment and tough business policies, Dr Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI) has explained some of the challenges responsible for such decision despite Nigeria’s huge population size.
Yusuf said while such decision is negative for the Nigerian economy, several factors like harsh business environment could have forced the company to make such decision. He said it also could be due to intense competitive pressure.
He said, “Shoprite is an international brand with presence in 14 African countries and about 3,000 stores. The comparative analysis of returns on investment in these countries may have informed the decision to exit the Nigeria market.
“The opportunities for retail business in Nigeria is immense. But the competition in the sector is also very intense.
“There are departmental stores in practically every neighbourhood in our urban centres around the country. There is also a strong informal sector presence in the retail sector. It is a very competitive space.”
According to the Director-General, there are also important investment climate issues that constitute downside risks to big stores like Shoprite.
He said, “These include the trade policy environment, which imposes strict restrictions on imports; the regulatory environment, which is characterised by a multitude of regulators making endless demands.
“There is also the foreign exchange policy, which has made imports and remittances difficult for foreign investors. There are challenges of infrastructure which put pressures on costs and erodes profit margins.”
The LCCI boss added, “But we need to stress that Shoprite is only divesting and selling its shares; Shoprite as a brand will remain. I am sure there are many investors who will be quite delighted to take over the shares.
“It should be noted that there are other South African firms in Nigeria doing good business. We have MTN, Multichoice, Stanbic IBTC, and Standard Chartered Bank, among others. Some of them are making more money in Nigeria than in South Africa.”
He added that some sectors are more vulnerable to the challenges of the business environment than others.
Afrinvest Appoints Mrs. Onaghinon As COO
Afrinvest West Africa Limited, has appointed the former head of public private partnership agency of the Edo State, Mrs Onoise Onaghinon as its chief operating officer.
Onaghinon joined Afrinvest in 2003 as an analyst in the firm’s investment banking division, rising through the ranks to become an associate, then vice president and eventually executive director & head of investment banking.
She is a seasoned veteran in the Nigerian capital markets and investment landscape with over 18 years of experience in capital raising, mergers and acquisitions, and restructurings across many industries.
In 2017, Onaghinon took a sabbatical from the Firm to head the Public Private Partnership Agency of the Edo State Government. Having acquitted herself creditably in the public sector, she has rejoined the Firm to resume as the new COO.
Speaking on the appointment, group managing director of Afrinvest, Ike Chioke, said: “over the years, Onaghinon has demonstrated great leadership, professional excellence and outstanding client commitment in driving the firm’s business units, particularly our investment banking division. We are delighted to have her back and we look forward to leveraging her cross-disciplinary experience across the Afrinvest group”.
In her new role, Onaghinon will oversee human resources, legal & compliance, internal control and general services while leading the firm’s initiatives to improve efficiency across its subsidiaries.
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