Nigeria bank layoffs barred as crisis hits economy
Reuters
Published May 04, 2020 15:48
By Chijioke Ohuocha
ABUJA (Reuters) - Nigeria's central bank has barred commercial lenders from laying off staff as part of measures to minimise the impact of the coronavirus pandemic on households and the economy.
The regulator said that was suspending lay-offs by banks and that commercial lenders would need its approval in the event it becomes necessary to sack workers.
Nigerian banks, which had previously only required central bank approval to sack senior management and to shut branches, are analysing the impact of the coronavirus crisis on their business, loan books and operating costs.
Some are considering forbearance on loans to help customers weather crisis, banking sources told Reuters.
Access Bank (LG:ACCESS), Nigeria's largest lender, cut staff salaries and sacked contract workers accounting for 75% of its 30,000 workforce to save costs, banking sources told Reuters.
Africa's largest economy relies for 90% of its foreign exchange on oil and the price plunge triggered by the pandemic has hammered its currency NGN=D1 and cut government revenue.
Nigeria was already struggling to shake off the long-term impact of a 2016 recession before the coronavirus pandemic hit economies worldwide.
The central bank said in a statement released on Sunday that it discussed the operating cost of banks in light of the disruption caused by the pandemic and that its decision was made at a bankers committee.
The regulator, battling to stimulate the economy and curb inflation, has kept banking system liquidity tight to lure foreign investors into treasury securities to support the naira, which has hit new lows on the black market in recent weeks.
Nigeria began easing restrictions on Monday in its capital Abuja and in largest city Lagos, heralding the reopening of Africa's most populous nation after more than four weeks of coronavirus lockdown.
The government has said a stay-at-home order in place since March 30 in Abuja and the states of Lagos and Ogun will be lifted gradually over a six-week period.
Data from the statistics office on Monday showed that 40% of people in Nigeria live in poverty, underlining the low levels of wealth in the West African nation.
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Written By: Reuters
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